Washington, November 20 (Xinhua)-Federal Reserve Board Chair Jerome Powell announced on Friday that the central bank will return unused funds from its emergency COVID-19 loan facility to the Treasury.
“You indicate that due to your limitation of authority, CARES facilities will not be allowed to take out new loans or purchase new assets after December 31, 2020, at CARES facilities. He demanded that the Treasury’s surplus capital be returned, “Powell wrote. In a letter to Treasury Secretary Steven Mnuchin.
“In connection with the end of the year, we will consider with you an arrangement to return the unused portion of the funds allocated to the CARES law facility,” Powell wrote.
Powell’s comment came after Mnuchin requested the Federal Reserve Board to close five emergency COVID-19 lending facilities and return US $ 455 billion of unused funds on Thursday.
In a letter to Powell Thursday, Mnuchin said these emergency lending facilities, which are due to expire at the end of the year, “clearly achieved their goals.”
In March, Congress approved a $ 2.2 trillion COVID-19 bailout bill known as the CARES Act. It established various emergency lending facilities through the Federal Reserve and provided the Treasury with approximately $ 500 billion to guarantee lending.
However, the US Chamber of Commerce, the largest lobbying group in the United States, has called on the government to extend these emergency lending programs for the foreseeable future as the number of COVID-19 cases surges nationwide.
Neil Bradley, Vice President and Chief Policy Officer of the US Chamber of Commerce, said: “A widespread economic recovery as coronaviruses surge in communities across the country and US companies face ever-increasing challenges. We need the full support of the government by providing the necessary resources for the virus. ” statement.
“The abrupt termination of the Federal Reserve’s emergency liquidity program, including the Main Street Lending Program, has prematurely and unnecessarily joined forces with the next administration, opening the door to important liquidity options when it is most needed by businesses. I’ll close it, “Bradley said.
“We urge these programs to be extended for the foreseeable future and urge Congress to pass additional pandemic bailouts for American businesses, workers and industries that continue to suffer. “He added.
Federal Reserve Board of Governors: Returning Unused Emergency Loans to the Treasury
Source link Federal Reserve Board of Governors: Returning Unused Emergency Loans to the Treasury