COVID-19 And Fed Emergency Facilities
By Ashish Deccannawar
A featured article of our October 2021 edition of PRMIA's Intelligent Risk quarterly newsletter
COVID-19 led to systemic liquidity crisis around March 2020. The Federal Reserve Board (Fed) took extraordinary efforts and reacted with a lightning speed to alleviate this exogenous shock. Fed created number of liquidity facilities under the section 13(3) of the Federal Reserve Act citing unusual and exigent circumstances. Each and every facility played a critical role in not only stabilizing the American economy but also leading to rapid recovery. The aim of this article is to provide view on effectiveness of these emergency facilities that stabilized the financial markets and highlight the key differences between 2008 financial crisis era facilities and COVID-19 related emergency facilities.
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