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Report: Pandemic-Related Economic Risk Remains High

A new Federal Reserve report has reiterated the impact of the coronavirus pandemic on the country’s financial system and warned that investors’ risk appetite could decrease if economic recovery from the global health crisis lacks sustainability, The Wall Street Journal reported Monday.

The financial stability report noted that business debt could see a significant rise if the pandemic continues to affect production efforts and the uneven distribution of vulnerabilities in certain sectors has substantially affected some businesses than others.

The central bank previously launched programs to drive liquidity in money-market mutual funding as well as commercial-paper markets for loans on a short-term basis.

WSJ reports the Federal Reserve also implemented emergency lending initiatives, new policy strategies and guidance for interest rates in the past few months.

The central bank saw its asset portfolio jump to $7T in June, compared with $4T before the pandemic began.

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