The calls for the Fed to lend to all corners of the economy are striking given Congress’ move 10 years ago to restrict its emergency authority after the last economic meltdown
Unlike in the 2008 crisis, when the Fed sparked an outcry for bailing out nonbanks like insurance giant AIG and investment bank Bear Stearns, it now has formal buy-in from the Treasury Department for many of its emergency programs. Thanks to the landmark 2010 Dodd-Frank Act, Treasury Secretary Steven Mnuchin has to authorize the central bank to lend to such non-bank companies in emergencies, and his department has kicked in taxpayer money to cover losses if borrowers default.
“They opened up the channels, and when the Treasury gets more money, they’ll be able to scale up these programs,” former Fed Vice Chairman Donald Kohn said. Still, the amount of help that is directly targeted at consumers and small businesses will soften the criticism of moves to help larger firms, said Amanda Fischer, a former Democratic congressional aide who now directs policy at the Washington Center for Equitable Growth.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
GOP Sen. Pat Toomey: New Fed action shows why the stalled coronavirus bill is 'so essential''The Fed is not allowed to lose money. That's why our legislation is so essential,' Sen. Patrick Toomey told CNBC on Monday.
Read more »
Fed takes emergency action to stave off a depressionThe Federal Reserve is signaling it will do whatever it takes to save the coronavirus-ravaged American economy from a depression.
Read more »
Financial markets slip despite Fed announcing further intervention
Read more »
Stocks Fall Despite New Fed Intervention, Investors Await Disputed Coronavirus Relief PackageStocks fell this morning, even as the Federal Reserve pledged unlimited asset purchases to support the market and Congress nears an agreement on a massive coronavirus relief bill by skleb1234
Read more »
Fed alone can’t stop coronavirus selloff, investors say, as stocks tumble againThe Federal Reserve's unprecedented stimulus measures did little to brighte...
Read more »