The US Treasury Department may initiate its program in order to encourage purchases of mortgage-backed securities from banks with about $20 billion in public and private money. This has been down as much as $100 billion from what it was announced in March, it was said by two people who were familiar with the matter.
The treasury has planned to provide $1.1 billion in capital to eight to 10 money managers which it will pick for the Public-Private Investment Program, according to the people, who have asked that it should not be identified before the details are announced. $1.1 billion each will be raised by the firms for funds to buy distressed mortgage securities. This is less than what they had expected from the government to support. About $10 billion in government-backed loans is also included in the plan.
