spin_dry Posted March 17, 2020 Share Posted March 17, 2020 Fed unleashes commercial paper funding to support non-bank companies Brian CheungMarch 17, 2020, 9:47 AM CDT The Federal Reserve announced Tuesday that it will open a commercial paper funding facility to support the financing needs of companies facing stress amid the coronavirus outbreak. The facility will support rollovers of commercial paper, a commonly used form of unsecured, short-term debt issued to raise funds. With businesses forced to close and with consumer activity capped by quarantines around the country, concern has built up over previous weeks that companies will not be able to find funding to survive the public health crisis. The commercial paper funding facility will establish a special purpose vehicle (SPV) that will purchase unsecured and asset-backed commercial paper from eligible companies as long as the paper is rated A1/P1 as of March 17. The facility would be available to companies of various industries, not just banks. UNITED STATES - FEBRUARY 12: Federal Reserve chairman Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee on the Semiannual Monetary Policy Report on Wednesday, Feb. 12, 2020. (Photo by Caroline Brehman/CQ-Roll Call, Inc via Getty Images) “An improved commercial paper market will enhance the ability of businesses to maintain employment and investment as the nation deals with the coronavirus outbreak,” the Fed said in a statement. The facility was opened in coordination with the U.S. Treasury, which will provide $10 billion of credit production via its Exchange Stabilization Fund. The Fed has taken a number of uncommon actions recently amid the coronavirus outbreak. An emergency 50 basis point cut from the Federal Reserve on March 3 was not enough to stop market turmoil, and on Sunday night, the central bank made another abrupt announcement by slashing rates to zero. Fed Chairman Jerome Powell said the central bank’s actions over the past two weeks did not calm financial conditions as policymakers hoped, spurring the second emergency meeting. In addition to pushing rates down to zero, the Fed also restarted the crisis-era policy of asset purchases, announced U.S. dollar swap lines, and eased bank rules to encourage lending. Quote Link to comment Share on other sites More sharing options...
f7ben Posted March 18, 2020 Share Posted March 18, 2020 Hello helicopter money..... Quote Link to comment Share on other sites More sharing options...
Anler Posted March 18, 2020 Share Posted March 18, 2020 1 hour ago, f7ben said: Hello helicopter money..... $50 trillion would do alot. Give it to the people not the companies! Quote Link to comment Share on other sites More sharing options...
f7ben Posted March 18, 2020 Share Posted March 18, 2020 2 minutes ago, Anler said: $50 trillion would do alot. Give it to the people not the companies! $500 trillion minimum Quote Link to comment Share on other sites More sharing options...
Gold Member Kivalo Posted March 18, 2020 Gold Member Share Posted March 18, 2020 2 minutes ago, Anler said: $50 trillion would do alot. Give it to the people not the companies! Yep, IF we do this we gotta give it to people to spend. This is a consumer economy after all. Quote Link to comment Share on other sites More sharing options...
Anler Posted March 18, 2020 Share Posted March 18, 2020 Just now, f7ben said: $500 trillion minimum Oh man, everyone gets a million! Quote Link to comment Share on other sites More sharing options...
Anler Posted March 18, 2020 Share Posted March 18, 2020 Just now, Kivalo said: Yep, IF we do this we gotta give it to people to spend. This is a consumer economy after all. I call it "trickle up" Quote Link to comment Share on other sites More sharing options...
Gold Member Kivalo Posted March 18, 2020 Gold Member Share Posted March 18, 2020 3 minutes ago, Anler said: I call it "trickle up" Republicans should love it, it'll be like a big ass tax break! Quote Link to comment Share on other sites More sharing options...
Anler Posted March 18, 2020 Share Posted March 18, 2020 Just now, Kivalo said: Republicans should love it, it'll be like a big ass tax break! A tax refund! 1 Quote Link to comment Share on other sites More sharing options...
Angry ginger Posted March 18, 2020 Share Posted March 18, 2020 12 hours ago, f7ben said: $500 trillion minimum 999 trillion FTMFW Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.