1. Central bank responses to COVID-19
- Author
-
Patricia C Mosser
- Subjects
Economics and Econometrics ,Leverage (finance) ,Credit programs ,Coronavirus disease 2019 (COVID-19) ,Lender of last resort ,Monetization ,media_common.quotation_subject ,Central banks ,05 social sciences ,Monetary policy ,COVID-19 ,Financial system ,Fiscal policy ,Market liquidity ,Federal Reserve ,Debt ,0502 economics and business ,Original Article ,Business ,050207 economics ,Business and International Management ,050205 econometrics ,media_common - Abstract
Central bank responses to COVID-19 have been extraordinary in speed, in size and in scope. Much easier monetary policy, massive liquidity provision, and targeted credit support to the real economy all played a role in stabilizing financial conditions and credit. On net, there is preliminary evidence that central bank actions have been a positive-for access to credit and for the real economy-during very trying times. But the first six months have made clear that central bank policy can only indirectly address the core economic policy challenges of the crisis, whose trajectory remains highly uncertain. The risks to the economy and financial system remain very large, and key policy questions-on the degree of fiscal policy support to the real economy, about the limits of central bank risk taking and monetization of debt, and about the wisdom of heavy reliance on central bank policies given their impact on leverage and debt levels-remain just that.
- Published
- 2020
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