Federal Reserve expands access to its PPPLF to additional lenders
In it's yet another move to combat the coronavirus (COVID-19), the US Federal Reserve (Fed) announced to expand access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expanded the collateral that can be pledged.
Key quotes
The changes will facilitate lending to small businesses via the Small Business Administration's (SBA) Paycheck Protection Program (PPP).
As a result of the changes, all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. SBA-qualified PPP lenders include banks, credit unions, Community Development Financial Institutions, members of the Farm Credit System, small business lending companies licensed by the SBA, and some financial technology firms.
Additionally, eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral to the PPPLF.
The SBA's PPP guarantees loans from qualified lenders to small businesses so that those businesses can keep workers employed.
FX implications
The news failed to put a bid on the risk despite being positive to the markets. The reason could be traced from US President Trump’s latest salvo against China that renews trade war concerns. As a result, the US equity futures remain on the back foot during the Asian session at the start of the month.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
