Banks report mixed demand for Fed Main Street loans as launch nears
By Polo Rocha
Banks are gearing up to start lending under the Federal Reserve’s new Main Street program, but how quickly businesses will seek loans remains uncertain as the program approaches its launch. The Fed took a major step this week to get the $600 billion Main Street program operational, releasing sample loan agreements and details on what each loan document must include. …The Fed has been flexible in responding to the feedback it has received on the Main Street program, but it is unlikely to be “flexible enough” to take on more risk, said Karen Petrou, managing partner at Federal Financial Analytics. “If the terms of the Main Street program are easy, the Fed becomes the nation’s biggest business bank,” she said. “I’m not sure we really want that to be a permanent [feature] of the United States financial system. It would be hard to roll back.”