Do More to Avert a Liquidity Crisis

The Federal Reserve, Treasury Department and banking regulators deserve congratulations for their bold, necessary actions to provide liquidity to the U.S. financial system amid the coronavirus crisis. But more remains to be done.

We thus recommend: (1) immediate congressional action to expand the Federal Deposit Insurance Corp.’s authority to guarantee bank liabilities and to authorize the Treasury to use the Exchange Stabilization Fund to guarantee prime money-market funds, (2) regulatory action to effect temporary reductions…

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