The US Treasury is already hiring experts to help buy troubled assets from financial institutions, but the most important question behind the bail-out plan remains open: what is the right price for these assets since they are not actively traded?
The answer usually given is a "reverse auction". But this process is not ideally suited for mortgage-backed securities and would have to be supplemented to meet the multiple goals of the bail-out, which include aiding overstretched mortgage holders, avoiding overpayment by the US Treasury, and freeing up funds for more bank lending.
