St. Louis Fed President James Bullard warned that the risk of a financial crisis remains. He said “without more granular risk management on the part of the health policy, we could get a wave of substantial bankruptcies and could feed into a financial crisis,”
Hence, “it’s probably prudent to keep our lending facilities in place for now, even though its true that liquidity has improved dramatically in financial markets.” The idea to is to make sure that markets don’t freeze up entirely in the twists and turns of a crisis.
