Nations Try to Contain COVID-19 Economic Damage: DW

Cities have imposed lockdowns to slow the spread of COVID-19, disrupting and even stalling economic activity. Advanced economies simultaneously address both health and economic crises, providing funding to develop and test treatments and vaccines while ensuring liquidity for banks and companies through credit and tax measures. The goal: Keep markets liquid and tradable. Some countries like Portugal target specific sectors, whether airlines and hospitality or banks and food supplies; other countries open credit taps for businesses all categories and sizes. The United States is working on the largest stimulus package, worth about $1 trillion, to distribute cash payments to most Americans. The US Federal Reserve also announced three finance mechanisms to assist households and businesses, a six-month collateral program for major financial institutions and an emergency lending program for banks. Smaller nations also enact measures, representing 20 percent and more of annual budgets. Turkey is increasing pension payments, reducing taxes and expanding home health care for citizens 80 years and older. Government leaders implore banks, landlords and businesses to help workers and customers. Many urge broader regional solidarity, assistance, shared data and understanding during this global crisis. – YaleGlobal

Nations Try to Contain COVID-19 Economic Damage: DW

Coronavirus is wrecking global markets, and nations roll out emergency and economic-assistance plans to salvage economies
Kate Martyr and Ankita Mukhopadhyay
Saturday, March 21, 2020

Read the article from Deutsche Welle about nations preparing emergency economic-assistance pagages

Select Economic Assistance Packages Japan $10 Portugal $10 Turkey $15 Netherlands $22 Italy $28 Sweden $30 EU $41 Austria $42 France $50 Canada $55 Australia $56 Spain $219 UK $398 US $1,500

Cities shut down: The United States represented about 15 percent, Europe represented 16 percent and China represented  18 percent of the global GDP, all adjusted for purchasing power parity, in 2018 (Source: Deutsche Welle and US News & World Report; photo of Wall Street, Reuters)

Also read “New York Fed Pledges to Offer $1 trillion a day in Overnight Repo Loans” from Reuters: “The Fed said it will offer up to $500 billion in overnight repo loans each morning and an additional $500 billion in overnight repo loans each afternoon. This is the latest effort from the central bank to keep markets operating smoothly despite volatility related to the coronavirus pandemic.” 

Investopedia explains the repo market: “A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price. That small difference in price is the implicit overnight interest rate. Repos are typically used to raise short-term capital. They are also a common tool of central bank open market operations.”

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