Bankers say they’re still trying to figure out if the Fed’s complex loan-buying vehicles will help them cater to the needs of midsize commercial customers hammered by the economic shock from the coronavirus outbreak.
Midsize businesses and state and local governments are among the beneficiaries of the central bank's latest $2 trillion effort to mitigate the economic damage caused by the coronavirus pandemic.
Many banks were hitting their limits for lending to small businesses devastated by the coronavirus outbreak. They say the Fed's decisions to help fund additional loans and relax capital requirements will resolve many of their problems.
The maneuver could delay efforts by Senate Majority Leader Mitch McConnell, R-Ky., and Treasury Secretary Steven Mnuchin to add another $250 billion to the Paycheck Protection Program.
Critics who argue this crisis mirrors the 2008 financial panic when Congress bailed out banks have it wrong. The new relief package in response to the coronavirus pandemic was necessary to save livelihoods, and more can be done.
The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.
The bank will be allowed to exceed the limit to enable it to make more small business loans; the CEOs of HSBC and StanChart are also donating part of their pay to coronavirus victim charities.
