COVID-19 Financial Crisis: Timeline of Key Developments

July 20, 2020

The ECB expanded the Pandemic Emergency Purchase Programme (PEPP) by €600B to a total of €1,350B.

The Federal Reserve (Fed) announced an expansion in the number and type of entities eligible to directly use its Municipal Liquidity Facility (MLF).

The Fed expanded scope and duration of the MLF, which was originally announced on April 9. As revised, the Fed will buy up to $500B of short-term notes issued by US states, counties with a population of at least 500,000 residents, and cities with a population of at least 250,000 residents. These new population thresholds substantially expand the borrowing base.

Paycheck Protection Program and Health Care Enhancement Act ($484B) signed into law.

The Fed announced temporary actions aimed at increasing the availability of intraday credit extended by Federal Reserve Banks.

The Fed announced the creation of the MLF, aimed at allowing state and local governments access to credit
The Fed announced the creation of the Paycheck Protection Program Lending Facility (PPPLF). Part of CARES Act, it allocates funds to be used by the Small Business Administration (SBA)
The Fed announced the creation of the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF) aimed at small- and medium-sized enterprises (SMEs). Together they are called the Main Street Lending Program (MSLP)

Click here to read Loomis Sayles' take on the MLF.

The Fed announced FIMA - Foreign and International Monetary Authorities Repo Facility, which allows foreign and international monetary authorities to enter into repurchase agreements with the Fed

Click here to read Loomis Sayles' take on the FIMA Repo Facility.

Coronavirus Aid, Relief and Economic Security (CARES) Act ($2.3T, around 11% of GDP) signed into law

The Fed established facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
The Fed revived the Term Asset-Backed Securities Loan Facility (TALF). TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets. It will lend to those holding AAA-rated ABS.

Click here to read Loomis Sayles' review of PMCCF & SMCCF. Click here to read Loomis Sayles' review of the revival of TALF.

The Fed expanded temporary US dollar liquidity arrangements with other central banks
Families First Coronavirus Response Act ($100B) signed into law
ECB announced €750B Pandemic Emergency Purchase Programme (PEPP)
EU governments allowed to give grants, tax breaks and advance payments of up to €800,000 to companies until year-end

Click here to read Loomis Sayles' take on the ECB's rescue programs.

US tax payments deferred until July 15
The Fed expanded Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities
Foreclosure and eviction moratorium for all Federal Housing Administration-insured single-family mortgages for 60 days

The Fed cut interest rates by 1% down to a range of 0.00% to 0.25%
The Fed restarted quantitative easing, purchasing $500B in Treasurys and $200B in mortgage-backed securities
Coordinated central bank action supporting US dollar liquidity

Click here to read Loomis Sayles' view on the Fed action.

The Fed substantially expanded reverse repo operations, adding $1.5T in liquidity to banking system
The ECB updated monetary policy

Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ($8.3B) signed into law

Click here to read quick takes on the market and economic impact of the coronavirus from Loomis Sayles' research teams.

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