The Paycheck Protection Program Liquidity Facility (PPPLF)

Haoyang Liu () and Desi Volker
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Desi Volker: https://www.newyorkfed.org/research/economists/volker

No 20200520, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: On April 9, 2020, the Federal Reserve announced that it would take additional actions to provide up to $2.3 trillion in loans to support the economy in response to the COVID-19 crisis. Among the measures taken was the establishment of a new facility intended to facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program (PPP). Under the Paycheck Protection Program Liquidity Facility (PPPLF), Federal Reserve Banks are authorized to supply liquidity to financial institutions participating in the PPP in the form of term financing on a non-recourse basis while taking PPP loans as collateral. The facility was launched April 16, 2020. As of May 7, it had issued over $29 billion in loans (see the H.4.1 Statistical Release). This post lays out the background for the PPPLF and discusses its intended effects.

Keywords: Paycheck Protection Program; Paycheck Protection Program Liquidity Facility; COVID-19; Federal Reserve facilities; CARES Act (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Date: 2020-05-20
New Economics Papers: this item is included in nep-cba and nep-mac
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Citations: View citations in EconPapers (2)

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