Toxic assets on bank balance sheets have chilled lending and business activity, and until most of these assets are liquidated, the economic recovery will remain handicapped.

In 2008 the Troubled Asset Relief Program was supposed to address this problem. Tarp, however, morphed into a capital-injection program. In 2009, the Public-Private Investment Program was created to provide attractive liquidity and leverage to the buyers of toxic assets. Though PPIP will probably help to some degree, price remains a key impediment to banks' ability to sell large amounts of toxic assets.

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