OHIO (AP) The Federal Reserve is lifting a $1 billion infusion to help the credit rating agencies and commercial banks that are battered by the worst economic downturn in decades to give them more money.
The central bank on Tuesday approved the $1 million in emergency cash to help stabilize the ratings agencies and banks that have seen their lending rates sharply cut amid the economic downturn.
The U.S. government and the Federal Deposit Insurance Corp. will provide $700 million each.
The money will help cushion the banks’ ability to lend to companies and businesses during the next financial crisis and help boost the economy in the months ahead, the Fed said in a statement.
It did not say when it would be used.
The $1,400 billion was the first cash infusion to support ratings agencies since President Donald Trump took office in January.
It is a far cry from the $700 billion that President Barack Obama provided last year, which helped stabilize the financial markets and help the economy recover.
The Fed said it would also provide another $200 million in funding to commercial banks.
They include JPMorgan Chase, Bank of America, Citigroup, U.K.-based Barclays and Royal Bank of Scotland.
The funds are part of the $3.3 trillion package of emergency emergency loans, which is being approved by the Federal Open Market Committee.
The Federal Open Bank also approved the package.
S.-based commercial banks also are struggling, with their credit ratings dropping to historic lows and their debt burden climbing.