By Michael Spence

Depending on who you ask, the pubilc private investment programme announced by Tim Geithner is either part of a solution to today’s banking crisis or an aggravator of the problems. This debate will likely widen as the US government moves from the design stage to implementation. Read more

By Ricardo J. Caballero

The most effective antidote for the devastating role of uncertainty in financial markets is some form of public insurance or guarantee. One of the great virtues of the PPIP (public private investment programme) for Legacy Assets is that it provides such a guarantee to potential investors in these assets, and by so doing, it boosts their bid-prices thus facilitating the removal of troubled assets from banks’ balance sheets. Read more