U.S. to lay out plan to sop up bad mortgage assets

[Joanne98]

Source: Reuters


WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner will lay out a rescue plan on Tuesday that will rely on public and private funds to take $500 billion of bad assets off banks' books, sources said.

The plan would also extend a Federal Reserve program aimed at shoring up consumer lending to the troubled mortgage sector, allowing the U.S. central bank to extend up to $1 trillion in loans to holders of a wide variety of asset-backed securities, according to sources.

Details on Geithner's proposal for stabilizing a U.S. financial sector undermined by soaring losses on mortgage-related debts emerged following briefings Treasury officials provided for Capitol Hill lawmakers.

President Barack Obama told a news conference on Monday that cleaning up banks' balance sheets was a priority and didn't rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job.

"We don't know yet whether we're going to need additional money or how much additional money we'll need until we see how successful we are at restoring a level of confidence in the marketplace," Obama said.


Read more: http://www.reuters.com/article/topNews/idUSTRE5160AM20090210