Participation in the Main Street Lending Program for midsize companies is partly about public service, but the core business rationale is building "a banking relationship that continues on for some time," the Boston Fed chief says.
Worried about a lack of demand and that some of their customers are ineligible, community banks are still on the fence about participating in the effort to back loans for businesses recovering from the pandemic crisis.
The Federal Reserve Bank of Boston published details on the terms for lenders and borrowers to participate in the facility intended to provide coronavirus relief funds to middle-market firms.
The central bank said its program to support money market mutual funds will also serve as a backstop for state and local governments.