Search Results
Speech
Panel Remarks: The Fed and Main Street during the Coronavirus Pandemic
Panel Remarks at The Fed and Main Street during the Coronavirus Pandemic, WebEx event, April 23, 2020.
Speech
The Economy’s Outlook, Challenges, and Way Forward
President Rosengren’s comments were delivered at the Massachusetts Bankers Association’s New England Conference, and were based on a speech he delivered on September 23, 2020 to the Boston Economic Club.
Journal Article
The Main Street Lending Program
The Main Street Lending Program was created to support credit to small and medium-sized businesses and nonprofit organizations that were harmed by the pandemic, particularly those that were unsupported by other pandemic-response programs. It was the most direct involvement in the business loan market by the Federal Reserve since the 1930s and 1940s. Main Street operated by buying 95 percent participations in standardized loans from lenders (mostly banks) and sharing the credit risk with them. It would end up supporting loans to more than 2,400 borrowers and co-borrowers across the United ...
Speech
Official Monetary and Financial Institutions Forum Fed Week Financial Stability Session
Short-term credit markets have been disrupted in the past two recessions, and significant risks remain. For example, prime money market mutual funds and stablecoins bear attention. Substantial emergency actions were necessary to support lending during the pandemic, and the economy would benefit from being less dependent on ad hoc measures in crises. A properly implemented Countercyclical Capital Buffer, or CCyB, would help avoid some of these issues. Unfortunately, emergency facilities do well supporting large firms but are challenged somewhat to reach small firms. Without better facilities ...
Speech
Implementing the Fed’s Facilities: Moving at Maximum Speed with Maximum Care
Remarks before the Money Marketeers of New York University (delivered via audio webinar).
Report
How Did the MSLP Borrowers Fare Before and During COVID-19?
This policy brief uses Dun & Bradstreet (D&B) data to assess whether the Main Street Lending Program (MSLP) borrowers were in worse financial health than their peers before COVID-19 hit the economy hard in March 2020 or suffered worse deterioration afterward. The findings can help us better understand why these firms sought to obtain MSLP loans. We find that MSLP borrowers tend to be larger than their peer firms (that is, firms in the same industry and state). Within the same size group, MSLP borrowers are on average younger than their peers. Borrowers tended to have a slightly higher ...
Speech
An Update on the Economy and the Main Street Lending Program
Today I would like to speak with you about the pandemic, its effects on the economy, the implications for Federal Reserve policymaking, and some of the steps that the Fed is taking to address the crisis and mitigate its financial impact on American households and businesses.
Discussion Paper
Up on Main Street
The Main Street Lending Program was the last of the facilities launched by the Fed and Treasury to support the flow of credit during the COVID-19 pandemic. The others primarily targeted Wall Street borrowers; Main Street was for smaller firms that rely more on banks for credit. It was a complicated program that worked by purchasing loans and sharing risk with lenders. Despite its delayed launch, Main Street purchased more debt than any other facility and was accelerating when it closed in January 2021. This post first locates Main Street in the constellation of COVID-19 credit programs, then ...
Speech
The Economic Outlook – Optimism Despite the Challenges Ahead
We enter 2021 with some optimism. The pandemic is likely to continue to be a problem for public health and the economy until widespread vaccinations take hold. Nonetheless, with substantial fiscal and monetary support, I expect a robust recovery starting in the second half of this year. I also expect that short-term interest rates near zero will be appropriate throughout this year, and that the Federal Reserve will continue to purchase long-term assets until the economy is on a stronger economic footing.
Working Paper
The Main Street Lending Program: Who Borrowed and How Have They Benefited?
The Main Street Lending Program (MSLP) was established by the Federal Reserve to supply credit to small and, especially, midsize businesses so they could weather COVID-19–induced disruptions. This study uses Dun & Bradstreet (D&B) data on the financial condition and overall viability of firms to examine the characteristics of MSLP borrowers and their performance after receiving a loan relative to the performance of their peers. Estimates show that, even when differences in firms' industries and geographic regions are taken into account, a firm was more likely to borrow from the MSLP if it ...