WASHINGTON, Feb 10 (Reuters) - The following are excerpts from a speech U.S. Treasury Secretary Timothy Geithner will deliver on financial stability at 11 a.m. (1600 GMT).
"As President Obama said in his inaugural address, our economic strength is derived from 'the doers, the makers of things.'
"The innovators who create and expand enterprises.
"The workers who provide life to companies and, with their earnings, support families and invest in their future... This is what drives economic growth.
"The financial system is central to this process, transforming the earnings and savings of American workers into the loans that finance a first home, a new car or a college education, the credit necessary to build a company around a new idea.
"Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.
"Instead of catalyzing recovery, the financial system is working against recovery, and that's the dangerous dynamic we need to change.
"It is essential for every American to understand that the battle for economic recovery must be fought on two fronts. We have to both jump-start job creation and private investment, and we must get credit flowing again to businesses and families.
"Last fall, as the global crisis intensified, Congress acted quickly and courageously to provide emergency authority to help contain the damage.
"That vote gave the Administration the authority to act to pull the financial system back from the edge of catastrophic failure.
"The actions we took were absolutely essential, but they were inadequate.
"The force of government support was not comprehensive or quick enough to withstand the deepening pressure brought on by the financial crisis.
"The spectacle of huge amounts of taxpayer money being provided to the same institutions that help caused the crisis, with limited transparency and oversight, added to public distrust.
"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.
"Making Banks Strong and Healthy:
"Second, we're going to require banking institutions to go through a carefully designed comprehensive stress test, to use the medical term.
"We want their balance sheets cleaner, and stronger. And we are going to help this process by providing a new program of capital support for those institutions which need it.
"The capital will come with conditions to help ensure that every dollar of assistance preserves or generates lending capital above the level that would have been possible in the absence of government support.
"Public-Private Investment Fund:
"Third ... together with the Fed, FDIC and private sector, we will establish a Public Private Investment Fund. This program will provide government capital and government financing to help leverage private capital to help get private markets working again for the legacy loans and assets that are now burdening the entire financial system.
"By providing the financing the private markets cannot now provide, this will help start a process of providing a market for the real estate-related assets that are at the center of this crisis. Our objective is to use private capital and private asset managers to help provide a market mechanism for valuing the assets.
"Opening up new lending:
"In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them. Because this vital source of lending has frozen up, no plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses -- large and small.
"... I want to be candid: this comprehensive strategy will cost money, involve risk, and take time.
"We will have to adapt it as conditions change. We will have to try things we've never tried before. We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted.
"But we will be guided by the principles of transparency and accountability...
"... Dedicated to the goals of restoring credit to families and businesses...
"... and committed to moving our nation towards an economic recovery that is as swift and widespread as humanly possible.
"This is a challenge more complex than any our financial system has ever faced, requiring new systems and persistent attention to solve. But the President, the Treasury and the entire Administration are committed to see it through because we know how directly the future of our economy depends on it."