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. Bank Lending Survey

    A questionnaire circulated by a country's central banking authority ...
  2. Lending Facility

    A mechanism that central banks use when lending funds to primary ...
  3. Secondary Market

    A market where investors purchase securities or assets from other ...
  4. Bond for Bond Lending

    A lending structure used in the Federal Reserve's security lending ...
  5. Net Lending

    The amount of extra funds that a sector has available to provide ...
  6. Peer-To-Peer Lending (P2P)

    A method of debt financing that enables individuals to borrow ...
Related Articles
  1. Personal Finance

    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. Investing

    Securities Lending: Cause Of The Next Financial Crisis?

    Securities lending can pose risks to investor's portfolios and the entire financial system.
  3. Investing

    Comparing Primary And Secondary Capital Markets

    In the primary capital market, investors buy directly from the issuing company. In the secondary market, investors trade securities among themselves.
  4. 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.
  5. Investing

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
  6. Small Business

    Lending Clubs: Better Than Banks?

    If you need to borrow money and your credit is making it tough, this new option may be just what you're looking for.
  7. Insights

    Forces Behind Interest Rates

    Get a deeper understanding of the importance of interest rates and what makes them change.
  8. Investing

    Cash Flow Lending Vs. Asset-Based Lending

    When companies need financing, they rely on two primary forms of lending: cash flow-based and asset-based lending. We look at the pros and cons of each.
  9. Investing

    What's a Secondary Offering?

    A secondary offering is the issuance of new stock from a company that has already made its initial public offering.
  10. Insurance

    Peer-To-Peer Lending Breaks Down Financial Borders

    Banks are no longer the only option for a loan - the P2P lending system operates without them.
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. Why do we need a secondary market?

    Find out why secondary markets play a crucial role in economic activity by promoting efficiency, safety, information and ... Read Answer >>
  3. 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 >>
  4. 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 >>
  5. Who do hedge funds lend money to?

    Discover the various entities that hedge funds are lending to, and the reasons why these hedge funds have been providing ... Read Answer >>
Trading Center