DEFINITION of 'Consumer And Business Lending Initiative'

A plan initiated to aid in the government's goal of correcting the credit crisis by working on the secondary lending markets. Execution of the plan means extensive lending and reorganization of TALF.

BREAKING DOWN 'Consumer And Business Lending Initiative'

Without an effective secondary lending market, a large strain is placed on the major commercial banks, as the two lending mediums work hand in hand. Banks often combine their loans and sell them to the secondary markets, which keeps money flowing freely in the banks allowing them to continue to distribute both personal and business loans. Therefore, without the secondary markets, the lending from commercial banks dries up.

RELATED TERMS
  1. Bond for Bond Lending

    A lending structure used in the Federal Reserve's security lending ...
  2. Peer-To-Peer Lending (P2P)

    A method of debt financing that enables individuals to borrow ...
  3. Loan Committee

    The lending or management committee of a bank or other lending ...
  4. Secondary Market

    A market where investors purchase securities or assets from other ...
  5. Secondary Stock

    A stock that is considered riskier than blue chips because it ...
  6. Securities Lending

    The act of loaning a stock, derivative, other security to an ...
Related Articles
  1. Tech

    What Goldman Sachs’s Online Lending Means For Banking

    Recently Goldman Sachs has announced its entry into the online lending space. Most commonly known as an investment bank, Goldman’s newest venture may provide insight into the future of online ...
  2. Insights

    Overnight Rate

    Learn about how banks use this interest rate when lending to other banks.
  3. Investing

    Eyeing a Loan? Consider Skipping the Banks

    Peer-to-peer lending platforms, such as Lending Tree, Lending Club and Prosper, offer borrowers newfound leverage. Here's a look.
  4. Investing

    Securities Lending: Cause Of The Next Financial Crisis?

    Securities lending can pose risks to investor's portfolios and the entire financial system.
  5. Personal Finance

    Peer-To-Peer Lending - Determining The Future Of Banking Across The World

    The peer-to-peer lending industry continues to flourish. What does this mean for the future of loans from banks?
  6. Investing

    Lending Club Beats Analyst Estimates (LC, NTIOF)

    Lending Club announces $1.3 billion investment and optimistic earnings performance after strong reorganization measures.
  7. Financial Advisor

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
  8. Tech

    Lending Club, a Square Rival, Soars on Q3 (LC, SQ)

    Non-traditional online lending platforms post better-than-expected third quarter earnings, sending fintech stocks on the way to recovery.
  9. Tech

    Lending Club Announces Layoffs And More Founder Malpractices (LC)

    The fintech startup, which fired its founder earlier this year, announced layoffs due to lower loan volume and said that its former CEO and his family took out personal loans.
RELATED FAQS
  1. What constitutes a secondary market?

    Find out what constitutes a secondary market, and learn why that term can be applied far more broadly than you might initially ... Read Answer >>
  2. What impact does the Federal Reserve have on a bank's profitability?

    Learn how the Federal Reserve impacts a bank's profitability with its influence on the discount rate, federal funds rate ... Read Answer >>
  3. How does a credit crunch occur?

    A credit crunch occurs when there is a lack of funds available in the credit market, making it difficult for borrowers to ... Read Answer >>
  4. What kind of assets can be traded on a secondary market?

    Learn about the difference between the primary market and the secondary market, and what types of assets are traded on secondary ... Read Answer >>
  5. Are secondary capital markets beneficial for society, or are there purely speculative?

    Learn why secondary bond markets are essential for both the capital market and economy. Explore the reasons they must be ... Read Answer >>
  6. What economic indicators are important to consider when investing in the banking ...

    Find out which economic indicators are most useful for investors in the banking sector, especially those influenced by central ... Read Answer >>
Trading Center