On March 23, 2009, the FDIC, the Federal Reserve, and the United States Treasury Department announced the Public-Private Investment Program for Legacy Assets. The program is designed to provide liquidity for so-called "toxic assets" on the balance sheets of financial institutions.
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Economist and Nobel Prize winner Paul Krugman has been very critical of this program arguing the non-recourse loans lead to a hidden subsidy that will be split by asset managers, banks' shareholders and creditors.
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Therefore, such banks will only sell toxic assets at above market prices.
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Economist and Nobel Prize winner Paul Krugman has been very critical of this program arguing the non-recourse loans lead to a hidden subsidy that will be split by asset managers, banks' shareholders and creditors.
......
Therefore, such banks will only sell toxic assets at above market prices.
