The Federal Reserve's extraordinary effort to keep credit flowing to companies during the COVID-19 pandemic is also shunting money to banks' bottom lines.
Bank of America is set to price today a $1 billion bond issue to fund COVID-19 relief efforts. It's the first sale from a U.S. financial institution that explicitly links all proceeds to tackling the virus, Bloomberg data show.
The central bank’s programs announced since mid-April in response to the coronavirus outbreak match if not exceed the actions it took during the 2007-9 financial crisis.
Some say the agencies are exacting too high a price to buy loans from the cash-strapped lenders; some small banks hustled in dealing with the Paycheck Protection Program, others are accused of a hustle.
The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.
Restricting banking organizations’ lines of business would hurt their ability to compete in a constantly evolving financial system and to serve as sources of strength.
