Emergency Economic Stabilization Act of 2008


Emergency Economic Stabilization Act of 2008

Legislation in the United States that authorized $700 billion for the government to purchase high risk assets (particularly mortgage-backed securities) from banks and other financial institutions to keep these institutions from collapsing due to defaults. It also allowed this money to be used to provide capital directly to banks. The Act was passed because it was thought that the U.S. (and indeed the global) financial industry was on the verge of collapse because of excessive risk taking. It is widely considered a bailout of American (and some foreign) banks. See also: Late 2000s recession.