Fed data released on Thursday shows that the majority of emergency lending, during the early stages of the COVID-19 pandemic last year, was in the western United States. The Federal Reserve released details of its emergency lending program conducted between March and December 2020, which included loans to banks and large corporations to help prevent a financial crisis.
Overall, the Fed’s holdings increased by approximately $297 billion, with the majority of this money going to companies in the western United States. The data shows that the San Francisco Federal Reserve Bank made the most loans with a total worth of $174.2 billion, followed by the New York Federal Reserve Bank at $108.8 billion.
Of the total lending, approximately $135.5 billion went to banks and other financial institutions, with $95.5 billion going to large corporations. The remaining amount was lent to smaller businesses through the Main Street Lending Program.
The emergency lending program, known as the Secondary Market Corporate Credit Facility, was established by the central bank during the initial stages of the pandemic to ensure that companies had access to sufficient funds to prevent a financial crisis. The program purchased eligible corporate bonds and exchange-traded funds to provide liquidity to markets impacted by the pandemic.
As lockdown measures were enforced throughout the US, businesses, particularly in the hospitality and travel industries, suffered significant losses with many forced to shut down temporarily. The program was created to help prevent such businesses from going bankrupt, which would have a far-reaching impact on the US economy.
The Fed’s lending program has drawn criticism from some politicians, including former President Donald Trump, who argued that it primarily benefited large corporations. However, the central bank has defended its actions, stating that the program helped to support the economy and prevent a financial crisis.
The latest data from the Fed shows that the emergency lending program had a significant impact on preventing a financial crisis in the US during the early stages of the pandemic. However, with mass vaccination efforts underway and the economy gradually reopening, it remains to be seen how long the effects of this program will last, and whether or not more federal support will be required in the future.