Federal Reserve extends emergency lending facilities by 3 months
Programmes brought in to shore up financial markets during pandemic will now expire at end of year
The Federal Reserve is extending the emergency lending facilities it set up to shore up financial markets during the pandemic until the end of the year, in the latest sign of its concern that the coronavirus crisis will continue to weigh on the US economy.
The board of the US central bank announced the decision on Tuesday as its monetary policymakers began a two-day meeting. The lending facilities, which were designed to support short-term funding and corporate debt markets and to offer loans to struggling midsized businesses, were due to expire at the end of September.
“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 Fed said.
The facilities had “provided a critical backstop, stabilising and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments,” it added.
Fed officials had signalled that the lending facilities would be in place as long as they were needed and would not be allowed to lapse prematurely.
The Federal Reserve is extending the emergency lending facilities it set up to shore up financial markets during the pandemic until the end of the year, in the latest sign of its concern that the coronavirus crisis will continue to weigh on the US economy.
The board of the US central bank announced the decision on Tuesday as its monetary policymakers began a two-day meeting. The lending facilities, which were designed to support short-term funding and corporate debt markets and to offer loans to struggling midsized businesses, were due to expire at the end of September.
“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 Fed said.
The facilities had “provided a critical backstop, stabilising and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments,” it added.
Fed officials had signalled that the lending facilities would be in place as long as they were needed and would not be allowed to lapse prematurely.
The Federal Reserve is extending the emergency lending facilities it set up to shore up financial markets during the pandemic until the end of the year, in the latest sign of its concern that the coronavirus crisis will continue to weigh on the US economy.
The board of the US central bank announced the decision on Tuesday as its monetary policymakers began a two-day meeting. The lending facilities, which were designed to support short-term funding and corporate debt markets and to offer loans to struggling midsized businesses, were due to expire at the end of September.
“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 Fed said.
The facilities had “provided a critical backstop, stabilising and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments,” it added.
Fed officials had signalled that the lending facilities would be in place as long as they were needed and would not be allowed to lapse prematurely.