Early Tuesday morning, March 24 2009, U.S. Treasury Secretary Timothy Geithner released the ‘Public-Private Investment Program for Legacy Assets’ or PPIP for short. At the heart of this proposal is two plans to buy risky home loans from bank balance sheets and to buy risky mortgage backed securities off the markets with a combination of Government Investment, Private Investment and Government loans.

The full details of the plan are set out in the document, which can be viewed via the link below. This document describes how this proposal will work. However for those of you who would like a short summary, the New York Times produced an excellent snapshot, which can be seen here (New York Times Snapshot). This describes how this combination of public and private investment, along with low interest Government loans, will interact in the purchase of these assets.

We have also included some commentary in the form of a Q&A written by J. Bradford DeLong, Professor of economics at the University of California at Berkeley, which discusses some of the broader implications of the plan and how it might affect things such as unemployment which can be found here (J. Bradford DeLong).

Click here to view the PPIP.