Economics
Fed Unleashes Emergency Loan Facilities as U.S. Braces for Virus
- Central bank uses emergency authorities with Treasury approval
- Fed provides backing for commercial paper, primary dealers
This article is for subscribers only.
The Federal Reserve unleashed two emergency lending programs on Tuesday to help keep credit flowing to the U.S. economy amid strain in financial markets that it blamed on the coronavirus pandemic.
The central bank is using emergency authorities to establish a Commercial Paper Funding Facility with the approval of the Treasury secretary, according to a Fed statement on Tuesday. The Treasury will provide $10 billion of credit protection from its Exchange Stabilization Fund. Later in the day it announced a Primary Dealer Credit Facility, also with backing from Treasury.