Public-Private Investment Program - PPIP

A A A

DEFINITION

A plan designed to value and remove troubled assets from the balance sheet of troubled financial institutions in the U.S. Essentially, the Public-Private Investment Program's goal is to create partnerships with private investors to buy toxic assets. The program is designed to increase liquidity in the market and to serve as a price-discovery tool for valuing troubled assets.



INVESTOPEDIA EXPLAINS

The Public-Private Investment Program consists mainly of two parts: a Legacy Loans Program and a Legacy Securities Program. The Legacy Loans Program uses FDIC-guaranteed debt along with private equity to purchase troubled loans from banks. On the other hand, the Legacy Securities Program is designed to use funds from the Federal Reserve, Treasury and private investors to reignite the market for legacy securities. Legacy securities include certain mortgage-backed securities, asset-backed securities and other securitized assets that the government deems to be eligible for the program.


RELATED TERMS
  1. Toxic Assets

    An asset that becomes illiquid when its secondary market disappears. Toxic assets ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank failure. The ...
  3. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage or collection ...
  4. Price Discovery

    A method of determining the price for a specific commodity or security through ...
  5. Bailout

    A situation in which a business, individual or government offers money to a ...
  6. Credit Crisis

    A crisis that occurs when several financial institutions issue or are sold high-risk ...
  7. Troubled Asset Relief Program - ...

    A government program created for the establishment and management of a Treasury ...
  8. Rollup

    A rollup (also known as a "roll up" or a "roll-up") is when ...
  9. Bear Fund

    A mutual fund designed to provide higher returns when the market declines in ...
  10. Global Recession

    An extended period of economic decline around the world. The International Monetary ...
Related Articles
  1. Should You Buy Banks'
    Insurance

    Should You Buy Banks' "Toxic" Assets?

  2. Top 6 U.S. Government Financial Bailouts
    Insurance

    Top 6 U.S. Government Financial Bailouts

  3. A Nightmare On Wall Street
    Insurance

    A Nightmare On Wall Street

  4. Liquidity And Toxicity: Will TARP Fix ...
    Insurance

    Liquidity And Toxicity: Will TARP Fix ...

  5. The 2007-08 Financial Crisis In Review
    Mutual Funds & ETFs

    The 2007-08 Financial Crisis In Review

  6. Understanding Leveraged Buyouts
    Fundamental Analysis

    Understanding Leveraged Buyouts

  7. How The Sarbanes-Oxley Era Affected ...
    Fundamental Analysis

    How The Sarbanes-Oxley Era Affected ...

  8. Georges Doriot And The Birth Of Venture ...
    Investing

    Georges Doriot And The Birth Of Venture ...

  9. Warren Buffett's Bear Market Maneuvers
    Insurance

    Warren Buffett's Bear Market Maneuvers

  10. When Financial Crisis Strikes The Bank ...
    Budgeting

    When Financial Crisis Strikes The Bank ...

comments powered by Disqus
Hot Definitions
  1. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  2. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  3. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  4. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  5. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  6. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Trading Center