The Federal Reserve and the 2020 Economic and Financial Crisis

72 Pages Posted: 18 May 2020 Last revised: 7 May 2021

See all articles by Lev Menand

Lev Menand

Columbia University - Law School

Date Written: March 15, 2021


This Article provides a comprehensive legal analysis of the Federal Reserve’s response to the 2020 economic and financial crisis. First, it examines sixteen ad hoc lending facilities established by the Fed to fight the crisis and sorts them into two categories. Six advance the Fed’s monetary mission and were designed to halt a run on financial institutions. Ten go beyond the Fed’s traditional role and are designed to directly support financial markets and the real economy. Second, it maps these programs onto the statutory framework for money and banking. It shows that Congress’s signature crisis legislation, the CARES Act, suspended several existing restrictions on Fed lending sub silentio. And it reveals how the Fed’s lending to securities dealers and foreign central banks, a practice dating back more than fifty years, has never been expressly authorized by Congress. Third, it argues that these tensions reflect deficiencies in our contemporary economic and financial architecture. Finally, it suggests statutory reforms targeted at improving the government’s response to future economic and financial emergencies.

Keywords: Central Banking, Money, Banking, Lender of Last Resort, Monetary Policy, CARES Act, Federal Reserve, 13(3), Repo, Swap Lines, Emergency Lending, ESF, Shadow Banking, Eurodollars

JEL Classification: E40, E42, E44, E50, E51, E52, E58, E61, E62, E63, G01, G20, G21, G23, G28, K23, K40

Suggested Citation

Menand, Lev, The Federal Reserve and the 2020 Economic and Financial Crisis (March 15, 2021). European Corporate Governance Institute - Law Working Paper No. 518/2020, Stanford Journal of Law, Business, and Finance, Vol. 24, 2021, Available at SSRN: or

Lev Menand (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics