White House unveils plan to unclog bank credit

WASHINGTON: The Obama administration yesterday launched its much-awaited assault on the worst US banking crisis in 70 years, using billions of federal dollars to thaw the nation's frozen credit markets and ease the economy out of recession.

US Treasury Secretary Timothy Geithner's banking plan will use low-interest loans and between $75 billion and $100 billion of what's left of the government's $700 billion bailout fund to entice private sector investors to initially buy about $500 billion in toxic assets - taking them off the books of the nation's banks.

The administration also said the initial effort could grow to $1 trillion, as the program proves successful in attacking the problem that has stifled bank lending to consumers and business, compounding the worsening global downturn.