Going by the information from sources, a Monday-expected announcement from US Treasury Secretary Timothy Geithner would put forth the Obama administration’s move of buying nearly $1 trillion in sour loans and toxic assets from rundown banks.

The proposed move underlines the government’s intentions of creating a new entity - the Public Investment Corp – to finance the purchase of banks’ toxic assets, thereby easing borrowing for consumers and businesses. The projected $75 billion to $100 billion funds for the corporation would come from the $700 billion financial bailout package.

In order to buy up the toxic assets, the corporation is expected to combine its resources with the Federal Reserve, Federal Deposit Insurance Corp, as well as private investors, with the government putting much money and taking more risk compared to investors.

Sources, speaking on the condition of anonymity, elaborated that the administration plan will have three parts, namely: a public-private affiliation for supporting purchases of bad assets by private investors; expansion of a recent Fed program whereby investors can avail loans to buy securities backed by consumer debt; and making use of the FDIC to purchase toxic assets.

Commenting on the proposed move, chief economist Mark Zandi, of Moody’s Economy.com, said: "The sooner they get these assets off banks' balance sheets, the quicker the system will find its footing and get the economy moving again."