The United States government has fleshed out a plan it hopes can purge banks of up to $US1 trillion in toxic assets.
The government on Monday detailed a public-private investment plan to relieve banks of up to $US1 trillion of the bad debts at the heart of the global economic crisis.
The public-private scheme works by offering billions of dollars in US government incentives in equity and loan guarantees to entice investors to buy troubled assets and restore health to banks.
Initially, the Treasury will contribute $US75 billion to $US100 billion, taking the money from the $US700 billion financial rescue fund approved in October.
The government money would be put alongside private capital and then leveraged up to $US500 billion, or possibly double that amount, with the help of the Federal Deposit Insurance Corporation, a US bank regulator and the Federal Reserve.
US stock prices shot up, led by bank shares, as Washington ended weeks of speculation about details of its plan.
President Barack Obama said the plan was critical to a US economic recovery, but added there was still a long way to go.
Treasury Secretary Timothy Geithner said there was enough capital still in the $US700 billion bailout fund to get the program started, adding that it was too soon to say whether he would need to go back to Congress to ask for more money fix the banks.
