By David Lawder and Glenn Somerville

WASHINGTON (Reuters) - The United States offered on Monday financing for private
investors to help cleanse banks of [sic] up to $1 trillion in toxic assets that are blocking
lending and worsening a deep U.S. recession.

"If the U.S. authorities actually succeed in buying [sic] up to $1 trillion of 'toxic assets', it
would be considered a significant step," said Mamoru Yamazaki, chief economist with
RBS Securities in Tokyo.

"However, the markets will be disappointed if the programs do not move forward due
to problems regarding how the asset value is measured."

Initially, Treasury will pitch in with $75 billion to $100 billion to launch the partnerships,
taking the money from the $700 billion financial rescue fund Congress approved in
October, a Barack Obama administration official said.

The government money would be put alongside private capital and then leveraged up
to $500 billion, or possibly double that amount (emphasis added), with the help of
the Federal Deposit Insurance Corp, a U.S. bank regulator, and the Federal Reserve.

Under the program Geithner has crafted, the government will provide the lion's share of
the funding to buy up soured assets to encourage private investors to participate.

Geithner is due to brief on the plan at 8.45 a.m. (1245 GMT) on Monday.

http://www.reuters.com/article/newsO...52M02S20090323