Mr. Mnuchin is pulling the plug on a set of Fed emergency lending programs, which the central bank can use to keep credit flowing in times of crisis. The Fed is loath to take credit losses, so Treasury has been providing a layer of money to cover any loans or purchases that go bad. Mr. Mnuchin and lawmakers earmarked $454 billion to support Fed lending when they cut a deal on a government pandemic response package. Mr. Mnuchin ultimately earmarked $195 billion for specific loan programs. When Mr. Mnuchin said Thursday that he would end the five appropriation-backed programs at the end of 2020, he asked the Fed to give back all but $25 billion, which he is leaving to support already-made loans and bond purchases.

Source: New York Times November 20, 2020 23:03 UTC