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Full-Text Articles in Finance and Financial Management
United States: Commercial Paper Funding Facility Ii, Lily S. Engbith
United States: Commercial Paper Funding Facility Ii, Lily S. Engbith
Journal of Financial Crises
The outbreak of the COVID-19 pandemic in early 2020 caused widespread economic uncertainty, prompting government officials to act swiftly to combat potentially severe fallout. On March 17, 2020, the Board of Governors of the Federal Reserve announced the revival of the Commercial Paper Funding Facility (CPFF), a program that the government had utilized during the Global Financial Crisis (GFC) to provide a liquidity backstop to domestic issuers of commercial paper (CP). As with the first iteration of the program, the Federal Reserve Bank of New York (FRBNY) funded a special purpose vehicle (SPV) to purchase highly rated, US dollar-denominated CP, …
South Korea: Corporate Liquidity Support Organization, Lily S. Engbith
South Korea: Corporate Liquidity Support Organization, Lily S. Engbith
Journal of Financial Crises
The spread of the COVID-19 pandemic in the early months of 2020 strained liquidity in short-term corporate funding markets around the world. In response, the Korean government enacted a variety of direct and indirect measures to promote the smooth flow of credit to households and businesses. Most of these measures focused on highly rated companies. Recognizing the need to extend assistance to lower-rated issuers, the Bank of Korea (BoK) invoked its authority under Article 80 of the Bank of Korea Act to establish and fund the Corporate Liquidity Support Organization, Co., Ltd., a special-purpose vehicle (SPV) authorized to purchase up …
Sweden: Commercial Paper Purchases, Carey K. Mott
Sweden: Commercial Paper Purchases, Carey K. Mott
Journal of Financial Crises
In March 2020, governments took measures to curb the spread of the COVID-19 pandemic that significantly impacted corporate revenues. The uncertainty surrounding the pandemic drove investors out of corporate securities and into safe assets, complicating the ability of Swedish nonfinancial corporations to finance their operations. As the volume of commercial paper issuance dropped, the Sveriges Riksbank (Riksbank) announced on March 19, 2020, it would purchase commercial paper and corporate bonds as part of a much larger bond-buying scheme that included Swedish government, municipal, and covered bonds. It authorized the program under Chapter 6, Article 5 of the Sveriges Riksbank Act. …
Canada: Commercial Paper Purchase Program, Lily S. Engbith
Canada: Commercial Paper Purchase Program, Lily S. Engbith
Journal of Financial Crises
In response to the onset of the COVID-19 crisis in early 2020, the Bank of Canada (BoC) enacted a wide-ranging program of monetary measures intended to support the flow of credit to individuals, firms, and municipalities. On March 27, 2020, the BoC announced the establishment of the Commercial Paper Purchase Program (CPPP), a liquidity facility designed to purchase highly rated commercial paper (CP), including asset-backed CP, from Canadian incorporated firms, municipalities, and provincial agencies. The BoC funded the program using settlement balances, and it retained several private firms to manage the asset purchases and liaise with issuers. Although firms took …
The Debt Guarantee Program Of The Temporary Liquidity Guarantee Program (U.S. Gfc), Justin Katz
The Debt Guarantee Program Of The Temporary Liquidity Guarantee Program (U.S. Gfc), Justin Katz
Journal of Financial Crises
Following the collapse of Lehman Brothers in September of 2008, banks faced extreme difficulty in issuing new debt and finding affordable sources of funds due to heightened fears over counterparty solvency and liquidity risk. By the end of September, the TED spread had spiked to 464 basis points, and issuance of commercial paper fell 88%. On October 14th, to boost confidence and lower short-term financing costs, the Federal Deposit Insurance Corporation announced the Debt Guarantee Program (DGP) as part of the Temporary Liquidity Guarantee Program (TLGP). Under the DGP, the FDIC guaranteed in full a limited amount of senior unsecured …