Fed Liquidity Facility Successfully Anchored Commercial Real Estate amid Pandemic



W. Scott Frame, Steven Manning and Joseph Tracy

May 24, 2022

The value of commercial real estate—particularly office towers, retail centers and hotels—suddenly became uncertain when COVID-19 arrived in the U.S. in late February 2020.

One part of the Federal Reserve’s response to ensure continuation of the flow of credit to households and businesses was to reestablish the central bank’s Term Asset-Backed Loan Facility (TALF). Originally deployed in 2008 as a financial backstop amid the Global Financial Crisis, the facility helps support the issuance of asset-backed securities by anchoring prices for the most highly rated bonds.

We examine TALF use by investors in commercial mortgage-backed securities (CMBS)…

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