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Nobody would receive the bailout money directly/Freely.

The US Federal Reserve plans at buying illiquid securities from the banks & other financial institutions that are in trouble now. They would be buying assets like MBS (Mortgage Backed Securities), CDO's (Collateralized Debt Obligations) etc

The proportion in which each banks assets would be bought by this bailout plan would be decided by the plan coordinators.

The proceeds of this asset buying by the reserve (Cash) would be used by these banks and financial institutions to meet their liquidity needs and to infuse further liquidity into the economy.

The Fed Reserve would sell these assets at a later point of time once the economy stabilizes and repay the Treasury.

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16y ago

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