The Obama administration formally launched its latest edition of the financial rescue plan on Monday to help battered banks restore credit to the market. The plan calls for a partnership with private investors that could eventually buy up to $1 trillion of the assets dragging down banks and clogging credit markets.

The package using private investors’ funds separates the latest plan from previous packages, in which the government spent solely tax payer dollars to directly inject capital into banks by buying preferred shares.

The move of bringing in private investors was popular with many politicians as it shifts a significant portion of the risk off of tax payers and uses private capital rather than billions more of tax payer dollars.

The plan calls for $75 billion to $100 billion of funds from the existing financial bailout package, the TARP, Troubled Asset Relief Program. The government will then, through the Federal Deposit Insurance Corporation and the Federal Reserve provide cheap loans to private investors to give incentive to purchase the devalued assets.

The program will consist of three principles as defined by the Treasury Department. First, combining cheap government financing with private sector investment, “substantial purchasing power will be created, maximizing taxpayer resources,” Treasury said in a press release.

Second, private investors will share in both the risk and return from these assets, Treasury said, “with the private sector investors standing to lose their entire investment in a downside scenario and the tax payer sharing in profitable returns.”

The third principle outlined by Treasury is to use competitive auctions to help set prices for the hard to value assets.

Treasury continued to emphasize that private investors will share in the risk to reassure taxpayers that they are not shouldering the entire burden with another $1 trillion plan.

After Treasury Secretary Timothy Geithner announced the plan Monday morning the stock market opened sharply higher and continued throughout the day with both the Dow Jones and S&P 500 indices gaining over 6 percent.

The announcement by the Treasury Department came at the heels of an appearance by president Obama on the CBS news program “60 Minutes,” in which he called Wall Street “out of balance.”

“Because of bad bets made on Wall Street, there have been enormous losses,” Obama said during the “60 Minutes” interview, in which he defended his advocacy of increased federal regulation. “I want them [the people on Wall Street] to do well, but what I also know is that the financial sector was out of balance,” he said.