Type of Intervention: Financial and Economic
Sectors Involved: Central Bank
Intervention Categories: Finance policy and financial aid; Monetary and macro-financial policy
Level of Jurisdiction: Federal
Lead People/Agency: Federal Reserve
Overview: Federal reserve takes three new actions, among them: reduced reserve requirements to 0 percent and lowered the primary credit rate to 0.25 percent. Reserve requirements refer to an amount of cash that banks must hold relative to their total assets. The primary credit rate, often called the discount rate, is the interest rate banks must pay the Federal Reserve for short term loans. Ordinarily, banks are required to hold a certain amount of capital as a buffer against economic shocks. Both measures are intended to reduce banks’ capital holdings, thereby increasing the amount of capital that banks are able to use for lending to households and businesses.
Full details here: https://fraser.stlouisfed.org/title/677/item/587319/content/pdf/monetary20200315a1