Federal Reserve Extends Four Emergency Lending Programs Through March
By Nick Timiraos
The Federal Reserve on Monday said it had extended through next
March four backstop lending programs that helped to stabilize
short-term funding markets when the coronavirus pandemic hit this
The extensions were widely expected and don't apply to any of
the lending programs that the Treasury Department earlier this
month said it would not renew.
Treasury Secretary Steven Mnuchin on Nov. 19 told Fed Chairman
Jerome Powell that he would not grant extensions for five lending
programs that have backstopped markets for corporate and municipal
debt and to purchase loans made to small businesses and nonprofits
when those programs expire on Dec. 31.
In the same letter, Mr. Mnuchin indicated that he would agree to
extend four other programs, including the Paycheck Protection
Program Liquidity Facility, which made it more attractive for small
banks to fund PPP loans this past spring. The Fed agreed to extend
that program on Monday.
The Fed also extended the Commercial Paper Funding Facility,
which backed a critical market for short-term corporate IOUs that
seized up this past March, and the Money Market Fund Liquidity
Facility, which had likewise curtailed potential runs on
money-market mutual funds. The fourth program extended by the Fed
is the Primary Dealer Credit Facility, which allows Wall Street
banks the ability to pledge a broader range of collateral to the
The Fed had earlier said it disagreed with Mr. Mnuchin's
decision not to renew the other lending facilities but hadn't
formally voted on extending the remaining four.
Write to Nick Timiraos at firstname.lastname@example.org
(END) Dow Jones Newswires
November 30, 2020 09:42 ET (14:42 GMT)
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