The agencies issued a rule to better enable banks to participate in two of the Federal Reserve’s lending facilities and “support the flow of credit to households and businesses.”
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.
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 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.
The Federal Reserve's support for the commercial paper market made clear that it was willing to go beyond cutting interest rates, but the central bank may feel pressure to do even more as the crisis worsens.
U.S. financial stocks are down nearly 4% this week on rate pressure, but it’s even worse for European banks; the mutual fund giant will automatically sweep investor cash into a money fund yielding 1.9%.
