Emergency Economic Stabilization Act Law and Legal Definition

The Emergency Economic Stabilization Act of 2008 aims at providing economic stability to the U.S financial system. The object of the Act is to ensure economic well being of Americans citizens. The Act authorizes the Treasury Secretary to restore liquidity and stability to the system.

The Act provides around $700 billion to the Secretary of Treasury so as to achieve the object of the Act. The Secretary of Treasury, to achieve the purpose buys mortgages and other assets that are clogging the balance sheets of financial institutions.

The Act contains the following provisions:

1. to provides up to $700 billion for the Secretary of the Treasury to buy mortgages and other assets;

2. to raise the American debt ceiling from $10 trillion to $11.3 trillion; and

3. to establish a program to allow companies to insure those assets.