The Federal Reserve said Tuesday it is extending its menu of lending programs to businesses, governments and individuals to the end of 2020.
Originally set to expire Sept. 30, the myriad facilities, stretching from credit to small businesses up to the purchase of junk bonds now will stretch to Dec. 31.
The Fed began rolling out the initiatives as market functioning broke down in March. A lack of liquidity stemming from fears over the coronavirus crisis froze markets and pushed the Fed into various credit facilities, a number of which had their origins during the financial crisis.
Programs covered include facilities for primary dealers and money markets, corporate bond purchases on both the primary and second markets and the most recent rollout, the Main Street Lending Program. The Term Asset-Backed Securities facility also is included, as is the Fed’s end of the Paycheck Protection Program, the congressional initiative aimed at incentivizng businesses to maintain employees and continue operating during the pandemic.
A lending program for local and state governments already had been set to run to Dec. 31 and the commercial paper facility, which provides short-term funding for businesses, expires March 17, 2021.
The extension comes even though the take-up on most of the programs has been fairly slow. When they announced the initiatives in early April, Fed officials said the facilities could provide some $2.3 trillion worth of funding.
Thus far, though, the total loans have been about $110 billion.
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