The Bank Rescue Plan: US Government Disclose Finally

On Monday, US authorities disclose their plan to remove the toxic assets from bank statements. This is the latest move of Obama Administration to revive the economy and this plan is intended to play a very critical role in the Obama's multi-pronged plan to encounter the recession.

The main part of the plan is to develop a joint venture between government and private investors who will buy the toxic assets from banks. Through this it will help the banking sector to recover from those toxic assets. In this process the banking sector become more stable and will start to play their own role in healing the economy.

The government and private investors will sold those toxic assets at times when the economy is in good condition. If everything goes fine, then both the party will be successful to generate some profit. In case of more worse situation, the private investors investment will be protected by government.

At the same time Bank Supervisors will conduct a stress test on the bank to determine how much capital it would need if economy worsens. Then treasury will provide that much as capital and in exchange bank will share their ownership with government.