Banks Get Scaled-Down Bad Asset Plan

Federal banking regulators on Wednesday unveiled a much smaller version of its original plan to kick start the market for banks' bad loans.

The Public-Private Investment Program, or PPIP, is now offering up to $30 billion in leverage to facilitate private-sector purchases of banks' legacy loan securities, just 3% of the original scope. In announcing the revised program, a trifecta of key banking regulators said the program was downsized because of improvements in the financial markets, but that it could be "quickly expanded" if necessary.

"While the programs will initially be modest in size, we are prepared to expand the amount of resources committed to these programs," the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a statement. ...