Yale School of Management

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As Need for Additional Small Business Aid Intensifies, Preliminary Evaluations of the PPP Suggest It Improved Business Survival

October 21, 2020
A central component of the initial fiscal response to the Covid-19 pandemic, the Paycheck Protection Program (PPP) was designed to support small businesses in the United States. It launched on April 3 after Congress signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27, initially allocating $349 billion for the forgivable loan program. Congress later increased funding by $310 billion, bringing total funding to $659 billion. When the PPP closed for applications on August 8, it had provided $525 billion in support through more than 5.2 million loans.  Continue reading “As Need for Additional Small Business Aid Intensifies, Preliminary Evaluations of the PPP Suggest It Improved Business Survival”

Disagreements over the Municipal Liquidity Facility Erupt

October 21, 2020
The Congressional Oversight Commission (COC) released its fifth report on October 21, twenty-five days after the report was legally required to be distributed. The report focuses on the Municipal Liquidity Facility (MLF) established by the Federal Reserve (Fed), which was  the subject of a COC hearing on September 17. The MLF, established by the Fed under its emergency authority under Section13(3) of the Federal Reserve Act, was announced on April 9 and became operational on May 26.  The program is designed to provide liquidity to states and municipalities by purchasing up to $500 billion of bonds issued by these entities. Thus far the program has only purchased two notes, issued by the State of Illinois and the New York Metropolitan Transportation Authority (MTA). A number of commenters view the program as inaccessible and various legislators, including Senator Elizabeth Warren, have urged the Fed to amend the terms of the program to make it more available to the states and municipalities that are its intended participants and which are currently struggling with the effects of the pandemic on revenue.  Continue reading “Disagreements over the Municipal Liquidity Facility Erupt”

"Prioritizing Wall Street": Report by Select Subcommittee on Fed’s Corporate Bond Purchases

September 24, 2020
YPFS
On September 23, the United States House of Representatives Select Subcommittee on the Coronavirus Crisis released a report investigating corporate bond purchases by the Federal Reserve (Fed) in response to the economic downturn caused by COVID-19. Continue reading “"Prioritizing Wall Street": Report by Select Subcommittee on Fed’s Corporate Bond Purchases”

USDA Announces $14 Billion in Aid to Farmers

September 23, 2020
YPFS
The United States Department of Agriculture (USDA) announced on September 18 that a second tranche of approximately $14 billion in federal aid will be made available to agricultural producers struggling as a result of the ongoing COVID-19 pandemic. The Coronavirus Food Assistance Program (CFAP 2) provides direct support to farmers facing significant price declines. Continue reading “USDA Announces $14 Billion in Aid to Farmers”

Despite Stated Exclusion, the Fed Is Buying Bank Debt

September 21, 2020
YPFS
The Federal Reserve has said it won’t directly buy bonds issued by banks as part of its COVID financial rescue facilities. But a close review of its holdings reveals that by buying exchange traded funds, it has indirectly bought $2 billion of bank bonds—over 15% of its total corporate bond holdings. Continue reading “Despite Stated Exclusion, the Fed Is Buying Bank Debt”