Public-Private Investment Program - PPIP


DEFINITION of 'Public-Private Investment Program - PPIP'

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.

BREAKING DOWN 'Public-Private Investment Program - PPIP'

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.

  1. Toxic Assets

    An asset that becomes illiquid when its secondary market disappears. ...
  2. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
  3. Price Discovery

    A method of determining the price for a specific commodity or ...
  4. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  5. Troubled Asset Relief Program - ...

    A government program created for the establishment and management ...
  6. Bailout

    A situation in which a business, individual or government offers ...
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