The Treasury's involvement in the so-called "superconduit"--in which a group of banks will establish a fund for the purchase of mortgage and other asset-backed securities--has produced two kinds of reactions. One is fear that a government bailout of the big banks is under way, the other is puzzlement that any good could come from a group of banks purchasing more of something that they already have in excess.

The fears are misplaced. The possible beneficiaries of this plan go well beyond the banks themselves. . . .

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Peter J. Wallison is the Arthur F. Burns Fellow in Financial Policy Studies at AEI.