Treasury Secretary Unveils New Plan

On Tuesday, February 10, 2009, U.S. Treasury Secretary, Timothy Geithner, unveiled a new plan ("Plan") designed to address the U.S. credit crisis and restore stability to the nation's financial system. While many details are still to be released, the Plan will deliver as much as $2 trillion to the U.S. financial markets through the following four key elements:

• Public-Private Investment Fund ("Fund"). As we understand it, the Fund will have the task of purchasing troubled or illiquid assets from insured depository institutions. Initially, the Fund will be capitalized with public funds; however, the goal of the Fund is eventually to rely upon private investors for much of its funding. The Fund will allow private investors to negotiate and set the price of assets with the selling banks. It is anticipated that the Fund will have up to $500 billion in assets, with the potential to expand its holdings to as much as $1 trillion in assets.