- The Washington Times - Tuesday, March 17, 2020

The Federal Reserve said Tuesday it is establishing an emergency lending facility to support short-term commercial debt markets to help ease the impact of the coronavirus pandemic.

“The commercial-paper market has been under considerable strain in recent days as businesses and households face greater uncertainty in light of the coronavirus outbreak,” the Fed’s board of governors said in a statement. “By eliminating much of the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial-paper obligations, this facility should encourage investors to once again engage in term lending in the commercial-paper market.”

Treasury Secretary Steven T. Mnuchin said he notified Fed Chairman Jerome Powell that he approves the move.

“The economic disruption and uncertainty created by COVID-19 has created challenges for the commercial paper market, constraining access to short-term credit for American businesses,” Mr. Mnuchin said. “By providing short-term credit, the CPFF [Commercial Paper Funding Facility] will help American businesses manage their finances through this challenging period.”

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