Financial Stability Plan (FSP)

DEFINITION of 'Financial Stability Plan (FSP)'

A plan unveiled by the Obama administration in April, 2009, that was designed to stabilize the U.S. economy during the financial crisis of 2008-2009. The Financial Stability Plan (FSP) promised to take measures to solidify the American banking system, securities markets, mortgage and consumer credit markets. This somewhat controversial plan came as a response to the 2008 fallout in the mortgage and financial markets.

BREAKING DOWN 'Financial Stability Plan (FSP)'

The Financial Stability Plan (FSP) is estimated to cost the American taxpayer about $1 trillion. The FSP promised to create a new "public-private" governmental fund to absorb toxic assets and leverage private capital to stimulate the financial markets. It also aimed to further standardize the banking system and provide capital to unstable lending institutions. A consumer-business lending initiative was also included to restore consumer credit for stable borrowers.

RELATED TERMS
  1. Stabilization Policy

    A macroeconomic strategy enacted by governments and central banks ...
  2. European Financial Stability Facility ...

    An organization created by the European Union to provide assistance ...
  3. Global Financial Stability Report ...

    A semiannual report by the International Monetary Fund (IMF) ...
  4. Financial Stability Oversight Council

    A committee led by the U.S. Treasury Secretary that is charged ...
  5. Financial System

    A financial system can be defined at the global, regional or ...
  6. Troubled Asset Relief Program - ...

    A government program created for the establishment and management ...
Related Articles
  1. Credit & Loans

    Credit Crisis: Government Response

    By Brian PerryThe credit crisis has represented the gravest threat to the global financial system since the 1930s. Fortunately, policymakers have been proactive in their efforts to mitigate the ...
  2. Credit & Loans

    Credit Crisis: Conclusion

    By Brian PerryThis tutorial has examined the most remarkable period many investors may ever experience. The credit crisis reshaped the financial landscape, threatened the stability of international ...
  3. Professionals

    Stock Plans

    Stock Plans
  4. Economics

    How Automatic Stabilizers Work

    Many economists claim that automatic stabilizers only work in the short term and question their effect on government spending. In truth, automatic stabilizers do not always have enough impact ...
  5. Personal Finance

    Understanding The Basel III International Regulations

    The Basel III regulations mark a drastic reform in international banking. But how do they impact the future's investment landscape?
  6. Savings

    What Kind Of Financial Plan Makes Sense For You?

    Comprehensive financial plans can help people maximize their financial potential and make smart decisions. But how complex a plan do you really need?
  7. Professionals

    Purpose, Benefits and Components

    Purpose, Benefits and Components
  8. Credit & Loans

    How The Federal Reserve Affects Mortgage Rates

    The Federal Reserve's actions as it aims to maintain economic stability impact the cost of funds for banks and consequently for mortgage borrowers.
  9. Economics

    Top 4 Central Banks Dominating the World Economy

    Central banks play an integral role in market economies by maintaining the stability and credibility of national currencies used in those economies.
  10. Retirement

    4 Ways Financial Plans Get Derailed

    A financial plan is useless if it never gets put into use. Here are four things to avoid when creating one with a client.
RELATED FAQS
  1. How did the financial crisis affect the banking sector?

    Learn how the financial crisis impacted the U.S. and global banking sectors both immediately and with far reaching long-term ... Read Answer >>
  2. What is the Dodd-Frank Act? How does it affect me?

    The Dodd-Frank Wall Street Reform and Consumer Protection Act is a massive piece of financial reform legislation passed by ... Read Answer >>
  3. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  4. What is the long-term outlook of the banking sector?

    Find out about the long-term outlook for the banking sector. It has significantly changed after legislation that passed in ... Read Answer >>
  5. Why are the tangible assets of a company important to investors?

    Learn what the significant difference is between a financial forecast and a financial plan, for either individuals or for ... Read Answer >>
  6. What are my main rights as a 401(k) plan participant?

    Learn how under ERISA, 401(k) plan participants are guaranteed several important rights, including protections of their plan ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center