The U.S. Treasury announced that the investments made through the federal Public-Private Investment Program (PPIP) have gained $1.7 billion in profits during the first quarter of 2011. The program, created in 2009, was designed to purchase toxic assets from banks in an effort to stabilize the economy.
According to a report, the Treasury has received about $523 in cumulative equity distributions and dividends. The other $1.2 billion is the estimated unrealized gains from increased value of the holdings. Of the $29.4 billion of capital committed to the program, approximately $21 billion has been utilized in purchased assets.
“We’re still in the program’s initial stages, but we are pleased with the returns we’ve seen thus far,” Mark Paustenbach, a Treasury spokesman, said in a statement.
Many experts criticized the program when initially launched and state that the profits are small when considering the amount risk taken by the government in making the investments. The funding for the PIPP program were part of the $700 billion established by the Troubled Asset Relief Program, or TARP.