March 23, 2009

The Obama administration's latest attempt to tackle the banking crisis and get loans flowing to families and businesses would create a new government entity, the Public-Private Investment Program, to help purchase as much as $1 trillion in toxic assets on banks' books.The new effort, to be unveiled today, will be followed tomorrow with the administration's broad framework for overhauling the financial system to ensure the current crisis - the worst in seven decades - is not repeated.

A key part of that regulatory framework would give the government new authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.Administration officials believe this new power will save taxpayers money and avoid the type of controversy that erupted last week when insurance giant American International Group paid employees of its troubled financial products unit $165 million in bonuses - even though the company had received more than $170 billion in support from the federal government.