Federal Reserve press conference, 2020-03-15 — Chair Jerome Powell

Question (Howard Schneider, Reuters): Thanks, Chair Powell. Howard Schneider with Reuters. Two things, if I could. Could you describe any discussions you’ve had in coordination with the major banks—this whole talk of drawing down liquidity, drawing down capital buffers—how far can they draw it down? How much do you think they can put out—out to customer finance? Did you get explicit agreements for them that this will go to customer finance and not something else? And then, secondly, is there any discussion yet of—of using the 13(3) powers of the Fed to do some sort of direct lending facility?
Answer: We have given broad general guidance to the banks. We’d like them to use their buffers to provide—you know, to provide loans and—and also to work with their borrowers. As you can see, we’re providing a lot of guidance to them across a wide range, and they’re saying they have every intention of doing that. That’s good to hear. And—so we’ll see how that works out. There—there are a lot of discussions going on, and, you know, we hear the banks saying, that’s exactly what they’re going to do, so that’s a good thing. You know, we’re—of course, we’ve—we’re—we have nothing to announce on—on 13(3) powers, but, you know, of course, we—that’s part of our playbook in—you know, in any situation like this. So, as I said, we’re—we’re prepared to use our authorities as is appropriate to—you know, to support borrowing and lending in the economy, and, hence, to support the availability of credit to households and businesses.