The essence of the toxic asset plan

March 23, 2009 | By Jim Kim

In a nut shell, the Treasury's plans to ease toxic assets off the books of big banks will require private investors to put up some equity that will be matched by the government. That provides a down payment of sorts. The rest of the funds to buy assets will come in the form of non-recourse loans from the FDIC.

Banks still have to be willing to sell the assets, and it remains to be seen how high the bidding will go, and whether it will go high enough to make sense for banks. But there are tremendous risks here to taxpayers. There's no guarantee that the assets will ever recover in value. And you can bet banks will play hard ball; they will not sell until they get their price.

For more:
- here's an AP article
- analysts mixed on plans. Article
- PIMCO says it will participate. Article