U.S. President Barack Obama’s administration aimed squarely at the crisis clogging the U.S. credit system yesterday with a plan to take over up to $1 trillion US in sour mortgage securities with the help of private investors.
The co-ordinated effort by the U.S. Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. relies on a mix of government and private money — mostly from institutional investors such as hedge funds — to help banks rid their balance sheets of real estate related securities that are now extremely difficult to value.
The goal, said Obama, is to get banks lending again to jump-start the economy.
