Under criticism that banks were receiving billions of dollars in taxpayer money with little accountability, the Treasury Department unveiled a new plan this morning to remove toxic assets from banks’ books and encourage $1 trillion in new lending, the Associated Press reported.

The renamed “Financial Stability Plan,” announced by Treasury Secretary Timothy Geithner this morning, aims to create a public-private investment fund that would encourage private investors to buy about $500 billion in bad assets to get it off the banks’ books in hopes that it will encourage increased lending.

The details of the program are still being worked out, but the administration is reportedly weighing two approaches: providing guarantees for the bad assets to limit how much investors could lose or providing investors with low-cost financing through the Federal Reserve System.

The program also will devote $50 billion in federal funds to try to reduce home foreclosures and lessen the housing crisis.

The administration plans to more closely monitor banks receiving funding to ensure that the money they receive is being used to increase lending. The biggest banks participating in the program will be required to undergo a “stress test” of their balance sheets to ensure they are in sound enough condition to receive additional government funding.

The move comes after the previous administration’s Troubled Asset Relief Program, which provided $350 billion to banks, was widely criticized for not imposing enough restrictions on banks to make sure they used the money to boost lending.

“The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to the public distrust,” said Geithner.