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Public-Private Investment: A Three Prong Program for Legacy Assets

After weeks of anticipation and predictions, the U.S. Treasury Department (Treasury) today announced its plans to address the troubled real estate-related assets that have been a significant source of the recessionary forces overhanging the U.S. economy. Treasurys approach to these legacy assets is three pronged: (1) a legacy loan purchase program (Legacy Loans Program) using guarantees by the Federal Deposit Insurance Company (FDIC); (2) an expansion of the Federal Reserve Boards (FRB) Term Asset-Backed Securities Loan Facility (TALF), and (3) the establishment of public-private investment funds to tackle legacy securities (Legacy Securities Program). Collectively, this three-prong program is referred to as the Public Private Investment Program (PPIP).

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