Web Resource

Former Fed Chairs Bernanke and Yellen testified on COVID-19 and response to economic crisis

Bernanke, Ben S, Yellen, Janet L

2020

Overview

[...]the depth of the recession may leave scars—business closures and the deterioration of unemployed workers’ skills—that will affect growth for several years. Banks did not provide liquidity to offset these spikes, as they normally would, citing balance sheet limits and other constraints. Because repo markets are critical to the functioning of broader financial and credit markets, as well as for the transmission of monetary policy, the Fed has restored more-normal function in repo markets by conducting large-scale repo operations and by steadily increasing the quantity of reserves in the banking system. [...]the Fed has served as lender of last resort to the financial system, a classic function of central banks. [...]the Federal Reserve, with the support of the Congress and the Treasury, has also served during the current crisis as a lender of last resort to the non-financial sector, backstopping key credit markets facing the prospect of severe disruption from the pandemic.

• Publisher: The Brookings Institution
• Subject: American dollar / Central banks / Corporate profiles / Economic crisis / Interest rates / Recessions / Treasuries