Fed Rolls Out Big Guns To Support Economy

Warning of "severe disruptions" to the economy caused by the coronavirus pandemic, the Federal Reserve on Monday rolled out another series of facilities to provide financing for companies in distress.

In addition, the Fed said it will soon unveil a program to lend directly to small- and medium-sized companies -- those that have been hardest hit by the near complete shutdown of the US economy as authorities fight to contain the spread of the virus.

"While great uncertainty remains, it has become clear that our economy will face severe disruptions," the Fed said in a statement, pledging to use all available tools to contain the damage.

"Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."

In the latest action, the Fed revived facilities it last used during the 2008 global financial crisis, and expanded others announced in recent days. The three new programs will provide an additional US$300 billion in new financing.

One of the programs, the Term Asset-Backed Securities Loan Facility (TALF), will help backstop recent student loans, car loans and credit card debt as well as small business loans.

In addition, the Fed said it "expects to announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small- and medium-sized businesses."

The central bank pledged to "will continue to use it full range of tools to support the flow of credit to households and businesses." (AFP)