Apparently, interest in the Treasury’s Public Private Investment Program (PPIP) has been lower than the Treasury anticipated.  They have now decided to relax their guidelines:

WASHINGTON – As part of an ongoing effort to refine the guidelines and enhance the effectiveness of the Financial Stability Plan programs, the Treasury Department today released additional guidance for potential investors in the securities portion of the Public Private Investment Program (PPIP). The new guidance extends the deadline for application to the program and clarifies that participation criteria will be viewed holistically — failure to meet any one criterion will not necessarily disqualify a proposal. Additionally, the guidance highlights Treasury’s interest in program participation by small, minority and women-owned businesses; the potential for further expansion of participants and asset classes; and the interaction of the Federal Reserve’s Term Asset-Backed Securities Lending Facility (TALF) with this program.

What is not clear, however, is whether or not bailed out banks can now buy these toxic assets with taxpayer money:

It is unclear whether U.S. regulators will prevent banks receiving government aid from participating as buyers in the $1 trillion  Public-Private Investment Program PPIP.L designed to unclog credit markets and bank balance sheets.

But the program, where the government provides much of the financing and shoulders much of the risk, leaves open the prospect that banks, as well as private investors, could buy the troubled securities and loans. This means recipients under the government’s $700 billion bank bailout fund, the Troubled Asset Relief Program, might take part.

"Without very strict regulation you’re potentially creating big risks by allowing banks to buy toxic assets with house money," said Wayne Shaw, a professor at Southern Methodist University’s Cox School of Business. "It’s a terrible risk."

I wasn’t a fan of the Public Private Investment Program.  I like the idea of a "Public Public Investment Program" even less.

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