Treasury department's financial stability plan.(IN SESSION)(Brief article)

Separate from the stimulus package, the Treasury Department recently announced a multi-pronged program intended to help lay the groundwork for restoring the flows of credit to households and businesses. The major components of the plan include:

* A Public Private Investment Fund, jointly run by the Treasury and the Federal Reserve, with financing from private investors, to buy up hard-to-sell assets that have bogged down banks and financial institutions for the past year. Treasury Secretary Geithner said the new fund, often described as a "bad bank" for holding toxic assets, would start with $500 billion with a goal of eventually buying up to $1 trillion in assets.

* Expanding the existing Term Asset-Backed Securities Lending Facility (TALF) from $200 billion to as much as $1 trillion in order to restart the securitized credit markets that in recent years supported a substantial portion of lending to households, students, small businesses and others. TALF would also expand to include commercial mortgage-backed securities (CMBS).

* Direct capital injections into banks, using funds from the remaining $350 billion from the Troubled Asset Relief Program (TARP).

* An extension of the FDIC's Temporary Liquidity Guarantee Program (TLGP) to October 31, 2009. This program is intended to provide more liquidity to banks and financial institutions.

* A new framework of governance and oversight to help ensure banks receiving funds are held responsible for appropriate use of those funds through stronger conditions on lending, dividends and executive compensation, along with enhanced reporting to the public.

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