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Federal Reserve launches 3rd emergency lending program

Last Updated Mar 18, 2020 at 9:06 pm PDT

WASHINGTON — The Federal Reserve announced late Wednesday that it will establish an emergency lending facility to help unclog a short-term credit market that has been disrupted by the viral outbreak.

The Fed said it will lend money to banks that purchase financial assets from money market funds, including short-term IOUs known as commercial paper.

By facilitating the purchase of commercial paper, which is issued by large businesses and banks, the Fed hopes to spur more lending to firms that are seeking to raise cash as their revenues plummet amid the spread of the coronavirus.

Christopher Rugaber, The Associated Press