The Obama administration has revealed the latest measure in its colossal financial rescue plan,  enticing private  investors to buy up to $1 trillion in troubled assets carried by banks.

The new Public-Private Investment Program will provide financing of $500 billion to buy the troubled assets, a total that could balloon up to $1 trillion, according to the Treasury Department.

One of the integral parts of the financial package will be $75 billion to $100 billion from the TARP bailout, coupled with the capital from private investors such as giant bond fund Pimco, which agreed Monday to participate in the plan.

The plan also includes components for buying both legacy loans and legacy securities clogging up the balance sheets of banks. A price discovery mechanism will enable private sector investors to compete with one another to establish the prices of the loans and securities they purchase under the program. The Treasury said this would reduce the likelihood that the government would overpay for the assets.

"Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," wrote Treasury Secretary Timothy Geithner (pictured) in an op-ed in The Wall Street Journal.

For more details, visit the Treasury Department Web site.

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