Treasury Secretary Geithner unveiled details of a "comprehensive" financial stability plan Tuesday morning, admitting the strategy "will cost money, involve risk and take time." "We will have to try things we've never tried before," he said. "We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted." It is essential for every American to understand that the battle for economic recovery must be fought on two fronts, Geithner said. "We have to both jumpstart job creation and private investment, and we must get credit flowing again to businesses and families." Under this framework, the Treasury is establishing three new programs. Stress tests For starters, banking institutions will be required to go through a carefully designed comprehensive stress test, if you will. "We want their balance sheets cleaner, and stronger," he said. "And we are going to help this process by providing a new program of capital support for those institutions which need it." The Treasury's investments in these institutions will be placed in a new Financial Stability Trust. The government assistance will come with terms that should encourage the institutions to replace public assistance with private capital as soon as possible, Geithner said. "We believe that access to public support is a privilege, not a right. When our government provides support to banks, it is not for the benefit of banks, it is for the businesses and families who depend on banks... and for the benefit of the country." Public-private investment fund Alongside the new Financial Stability Trust, together with the Fed, the FDIC, and the private sector, The Treasury will establish a Public-Private Investment Fund. This program will aim to provide government capital and government financing to help leverage private capital in order to get private markets working again. Treasury believes the program should ultimately provide up to one trillion in financing, but will start it on a scale of $500 billion. 1 trillion to support lending Working jointly with the Federal Reserve, Geithner said the Treasury will commit up to a trillion dollars to support a Consumer and Business Lending Initiative. The initiative is meant to kickstart the secondary lending markets, to bring down borrowing costs, and to help get credit flowing again. The lending program will be built on the Federal Reserve's Term Asset Backed Securities Loan Facility, announced last November, with capital from the Treasury and financing from the Federal Reserve. "We have agreed to expand this program to target the markets for small business lending, student loans, consumer and auto finance, and commercial mortgages," Geithner said. The government will also take additional steps to make it easier for small businesses to get credit from community banks and large banks. By increasing the federally guaranteed portion of SBA loans, and giving more power to the SBA to expedite loan approvals, Geithner and his team believe they can turn around the dramatic decline in SBA lending that's occurred in recent months. The government will also, according to Geithner, launch a comprehensive housing program. He said the President has asked his economic team to come together with a comprehensive plan to address the housing crisis, the details of which will be announced in the next few weeks. "Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions, and are skeptical that their government has - to this point -- used taxpayers' money in ways that will benefit them," Geithner said. "This has to change." He said the government's work will be guided by the lessons of the last few months and the lessons of financial crisis throughout history. "As costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families, for businesses and for our nation," concluded Geithner. Write to Kelly Curran at kelly.curran@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.