The disruptions in economic conditions caused by COVID-19 are reaching the commercial paper and longer term debt capital markets. The Board of Governors of the US Federal Reserve System has already set into motion three separate facilities as part of its effort to facilitate credit and help alleviate collateral volatility that are expressly available to

On March 22, 2020, the United States Office of the Comptroller of the Currency (OCC) announced an interim final rule effective immediately to revise its short-term investment fund (STIF) rule for national banks acting in a fiduciary capacity.[1] The amendment allows the OCC to authorize banks to temporarily extend maturity limits of STIFs in order to address the market stress caused by the COVID-19 outbreak that is adversely affecting banks’ ability to operate in compliance with maturity limits identified in the STIF rule. While the amendment directly applies to national banks, other managers of STIF may be indirectly affected.[2]

In connection with the announcement of the interim final rule, the OCC announced an order, effecting the amendment to the STIF rule, to extend maturity limits for STIFs affected by COVID-19.[3] Pursuant to the order, a bank will be deemed to be in compliance with the STIF rule if:

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On March 17, 2020, as part of an effort to facilitate credit during disruptions in economic conditions caused by COVID-19, the Board of Governors of the Federal Reserve System (Federal Reserve) reestablished a dealer credit facility last operated during the 2008 credit crisis – the Primary Dealer Credit Facility (“PDCF2020”).[1] Available starting on March 20, 2020, PDCF2020 is a loan facility providing credit to primary dealers who in turn are making credit available to businesses and households. As with the Commercial Paper Funding Facility also reintroduced on March 17, the Federal Reserve established PDCF2020 using its powers under Section 13(3) of the Federal Reserve Act for “unusual and exigent circumstances,” which under the Dodd-Frank Act required the approval of Treasury Secretary Steven Mnuchin.[2] PDCF2020 is being administered by the Federal Reserve Bank of New York (“FRBNY”).[3]

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