FED Extends Temporary Lending Facilities Amid Ongoing Pandemic
FED extended the lending facilities that were scheduled to expire on or around September 30 to December 31, 2020. The extensions apply to the Primary Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Term Asset-Backed Securities Loan Facility, the Paycheck Protection Program Liquidity Facility, and the Main Street Lending Program. The Municipal Liquidity Facility is already set to expire on December 31, with the Commercial Paper Funding Facility set to expire on March 17, 2021.
The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the COVID-19 pandemic. The lending facilities of FED have provided a critical backstop, stabilizing and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments. Each facility was created under section 13(3) of the Federal Reserve Act with the approval of the Treasury Secretary.
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Keywords: Americas, US, Banking, COVID-19, Liquidity Facility, Lending Facility, Credit Risk, Liquidity Risk, Basel, Regulatory Capital, FED
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