WASHINGTON Struggling to contain the worst financial crisis in seven decades, the Obama administration wants to buy billions of dollars of toxic assets from banks to ease borrowing for consumers and businesses.
Some industry officials familiar with the details said Saturday they expected the approach would try to remove as much as $1 trillion from banks' books. An announcement from Treasury Secretary Timothy Geithner could come as early as Monday.
If banks are not burdened by the soured loans, then they would be in better shape to resume more normal lending.
According to administration and industry officials, the plan would rely on the Federal Reserve and the Federal Deposit Insurance Corp. to supplement the government's $700 billion bailout fund. The uproar over the millions of dollars in bonuses for employees at troubled insurance giant American International Group Inc. has dimmed prospects for getting more bailout money from Congress.
The officials, who spoke on condition of anonymity because the details have not been announced, said Geithner's plan will have three major parts:
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