The True Meaning of Public Private Investment Partnership (PPIP)

The proposed Public Private Investment Partnership (PPIP) is an extension of a cozy
relationship between the government and the financial sector that was a prime contributor
to the crisis.

On March 23, 2009 the Treasury Department released details on its Public Private Investment Partnership
Program (PPIP). The key features of this program are:

• The government would contribute $75 to $100 billion to partnerships with private investors. Private
  investors would contribute $400 billion.
• The partnerships would buy legacy loans from banks, allowing them to clean up their balance sheets.
• Partnerships would also buy legacy securities from banks and other financial institutions including
  insurance companies, pension plans, and mutual funds.
• The Treasury would also loan money to the partnerships equal to 50% of the equity capital of the fund,
  expanding their purchasing power.
• The profits from the purchase and sale of these securities would be shared by the partners (the
  government and private investors).