Bailed-out Banks Considering Buying Toxic Assets

U.S. Banks that have received government aid, including Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan (JPM), are considering buying toxic assets to be sold by rivals under the Treasury’s $1 trillion plan to revive the financial system, the Financial Times said.

The U.S. government’s plan, known as the Public-Private Investment Program, gives government help to private investors looking to buy loans and securities from banks.

The plans however, have proved controversial with critics charging that the government’s public-private partnership – which provide generous loans to investors – are intended to help banks sell, rather than acquire, troubled securities and loans.

A Treasury official told FT, this is “an open program designed to get markets going. It is between a bank and their supervisor whether they are healthy enough to acquire assets.” [via FT]

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