Key elements of bailout plan

OBJECTIVE: The bill provides up to $700 billion, starting with an initial $250 billion, to allow the Treasury Department to purchase troubled assets, mainly in the area of mortgages, that are weighing down the US financial system. The goal is to help free up frozen credit.

COST OF BILL: The $700 billion would be doled out by Congress in stages. After the first $250 billion is authorized, the president could request another $100 billion. The final $350 billion could be cleared by a further act of Congress.

ASSET PURCHASES: The Treasury Department, working with specialists chosen by the government, will have authority to fashion a program to buy devalued assets of banks.

PROTECTING TAXPAYERS: The government would be given ownership stakes in companies whose bad assets are purchased. After five years, if the government is facing a loss in the program, the Treasury Department will be required to submit a plan recommending how the money can be recouped from financial companies.

EXECUTIVE PAYS: Restrictions will be imposed on the pay and benefits received by executives whose companies are selling some of their bad assets through the program. If the Treasury takes a stake in a company, the top five executives would be subject to limits on their compensation. Executives hired after a financial company offloads more than $300 million in assets will not eligible for "golden parachutes."

OVERSIGHT: The Treasury would be required to provide details of its purchases within two days of the transactions and an oversight board would be created to monitor the operation of the program. The board would have members selected by Democratic and Republican leaders in the House and Senate, and top government officials also would provide oversight.

INSURANCE OPTION: The bill establishes a program in which banks could buy government insurance that would cover the principal and interest on certain troubled assets, rather than selling them outright.

BANK INTEREST: The program would permit the Federal Reserve to begin paying interest on bank reserves, giving it another tool for easing credit strains.

STUDY OF STANDARDS: The bill mandates a study on the impact of mark-to-market accounting standards, which critics blame for a downward spiral in bank assets.

EASING FORECLOSURES: The federal government may stall foreclosure proceedings on home loans purchased under the plan.

SOURCE: Associated Press, Reuters