The CEO says he is getting stronger and working remotely; if the lockdown lasts several months, the GSEs may need a bailout, FHFA head Mark Calabria says.
While analysts agree banks are in better shape than in 2008, lawmakers are dusting off a crisis-era tool used by the Federal Deposit Insurance Corp. to soothe potential liquidity fears during the coronavirus pandemic.
The Fed announced several new lending facilities and virtually “unlimited” purchases of Treasury bonds; Ana Botín will donate the money to a coronavirus fund.
The central bank's sweeping actions suggest a cash shortage gripping sectors directly hit by the pandemic. Banks were supposed to be protected by Dodd-Frank but are still vulnerable to a funding domino effect.
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.
BofA, JPMorgan said they are paying bonuses to branch and call center employees; the bank says removing the $1.9 trillion limit on growth will help it lend to more customers in need.
The agencies said banks could receive Community Reinvestment Act credit for activities addressing the virus fallout, and clarified earlier guidance encouraging banks to dip into their capital buffers.
The expansion of the dollar swap lines allows foreign central banks to meet the needs of companies and financial institutions rushing for dollars as the global payments system undergoes severe strain due to the coronavirus.
The Money Market Mutual Fund Liquidity Facility, established under the central bank’s emergency authority, echoes a version that was set up during the global financial crisis.
