WASHINGTON (AP) - The Obama administration today unveils a formula it hopes is the right one to resolve the nation's worst banking crisis in 70 years.
The goal is to buy as much as $1 trillion in bad assets and wipe them off banks' balance sheets, allowing them to resume more normal lending. The loan crunch is depressing economic activity and making the current recession more prolonged and severe.
The program envisions using the resources of the government's $700 billion bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp., as well as private investors.
Treasury Secretary Timothy Geithner will announce the plan today. In an opinion piece in today's Wall Street Journal, Geithner says hoping that banks can shed bad assets on their own, over time, "risks prolonging the crisis."