U.S. Treasury Secretary Timothy Geithner will announce details on Monday of the Obama administration's plans for removing so-called toxic assets from the banking system by enlisting private investors in the effort, the Treasury Department said on Sunday.

Treasury said Geithner will hold a briefing at 8:45 a.m. EST on Monday to talk about wide-ranging efforts to stabilize the financial system through pumping cash into faltering banks and its other efforts to try to increase lending.

Tomorrow, Treasury will release details of the next component: the Public Private Investment Program, which will invest alongside private investors in funds that will provide a market for the legacy loans and securities that currently burden the financial system, Treasury said in a statement.

Ridding banks' balance sheets of poorly performing assets is widely seen as a vital step in getting a credit crisis, that originated in the battered housing sector, under control.

The Treasury Department is also expected to brief private capital groups later on Sunday about incentives to get them involved in the plan to buy up banks' troubled assets, a source familiar with the matter said.

The aim will be to attract private investors into buying the unwanted assets, with the government providing incentives in the form of abundant loans and generous terms.

On Sunday the Treasury offered no insight into specific terms that Treasury might be prepared to offer nor any details about how many public-private funds it expects to seek out the troubled assets.

When the details are released on Monday, they will be presented to a market that has been roiled by a searing controversy over big bonus payments given to employees of insurer American International group when it was receiving government bailout money.

Congress is already seeking to take back the bonuses, a move that some analysts warn may make private-sector participants wary about getting involved in a toxic-asset purchase program if there is a risk they could face a backlash over future profits.

Geithner has been under pressure as well, stemming from an announcement last month that Treasury was mulling pubic-private investment funds but providing such scanty details that bank stocks slumped amid fears that some U.S. banks might face eventual nationalization.

(Reporting by David Lawder and Karey Wutkowski, writing by Glenn Somerville)

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