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 past spring.

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 Fed.

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


(END) Dow Jones Newswires

November 30, 2020 09:42 ET (14:42 GMT)

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