WASHINGTON - THE US Treasury Department late on Saturday released a fact sheet on its US$700 billion rescue plan for the financial sector proposed to Congress, highlighting that these were the details 'as of Saturday afternoon.' Herewith are key elements of the fact sheet:

Treasury will have authority to issue up to US$700 billion of Treasury securities to finance the purchase of troubled assets. The purchases are intended to be residential and commercial mortgage-related assets, which may include mortgage-backed securities and whole loans.

The Treasury secretary will have the discretion, in consultation with the chairman of the Federal Reserve, to purchase other assets, 'as deemed necessary to effectively stabilise financial markets.'

The timing and scale of any purchases will be at the discretion of Treasury and its agents, subject to the US$700 billion cap.

The price of assets purchases will be set 'through market mechanisms where possible, such as reverse auctions.' The dollar cap will be measured by the purchase price of the assets. The authority to purchase expires two years from the date of the legislation's enactment.

To qualify for the programme, assets must have been originated or issued on or before September 17, 2008. 'Participating financial institutions must have significant operations in the US, unless the secretary makes a determination, in consultation with the chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.'

The assets will be managed by private asset managers at the direction of Treasury to meet programme objectives. 'Treasury will have full discretion over the management of the assets as well as the exercise of any rights received in connection with the purchase of the assets.'

Cash received from liquidating the assets, including any additional returns, 'will be returned to Treasury's general fund for the benefit of American taxpayers.'

Funding for the programme will be provided directly by Treasury from its general fund. Borrowing in support of this programme will be subject to the debt limit, which will be increased by US$700 billion accordingly.

Within three months of the first asset purchases under the programme, and semi-annually thereafter, Treasury will provide the appropriate Congressional committees with regular updates on the programme. -- AFP