Further, it is necessary to equip the European regulatory framework10 to deal with a hypothetical systemic crisis, to address the problem of the liquidity of institutions under resolution, and to analyse the possible role of asset management companies in the event of severe impairment of European financial institutions’ balance sheets. EU Member States should also move swiftly to reach an agreement on creating a common European procedure for the administrative winding-up of credit institutions. Lastly, we should not overlook the importance of making headway on the agenda of measures for the capital markets union project. In October, the European Commission launched a new action plan, identifying 16 areas for action to drive the project forward. I would like to highlight some of the most significant ones: supervisory convergence; sustainable finance to consolidate European leadership worldwide; changing the regulatory treatment of securitisations to strengthen banks’ lending capacity; or promoting market financing to SMEs and the development of venture capital markets. In general, progress on these and other key matters, such as the creation of a European safe asset, is a complex task that requires the adoption of measures and regulatory changes in a wide variety of areas, and entails the full implication not only of EU authorities, but also of the Member States. It is crucial that the authorities concerned have the firm political will to implement the required measures and do away with barriers and red lines. In short, to avoid a piecemeal approach and the loss of momentum, the utmost political ambition must be mobilised.

At the outset of these purchases, we communicated that ETFs would only be used if their purchase is reasonably expected to achieve the objectives of the SMCCF more effectively than the purchase of underlying bonds.11 One month after starting ETF purchases, the Federal Reserve announced a framework to use corporate bonds as the SMCCF’s primary vehicle for providing support. In preparation, we had created a “Broad Market Index” of eligible corporate bonds, weighted proportionately by amount of debt outstanding from individual companies.12 We then began purchasing bonds across the index in a rules-based manner, taking care that our purchases are neutral toward eligible sectors and companies. I should note https://www.newyorkfed.org/newsevents/speeches/2020/sin201020  2/5  20/10/2020  The Federal Reserve’s Corporate Credit Facilities: Why, How, and For Whom - FEDERAL RESERVE BANK of NEW YORK  that in making an assessment of credit eligibility, we broadened our use of ratings to include perspectives from all Nationally Recognized Statistical Rating Organizations. Providing broad access also applies to the service providers that support the facilities. In early September, we announced the expansion of counterparties to the SMCCF, including several smaller and minority-owned broker-dealers.13 In early October, we announced the launch of our process to re-bid our engagement with the facility’s investment manager. This process has begun with the CCF cash management role, and in the coming weeks and months we will re-bid the remainder of the role.