Leveraged-Loan Stress Prompts U.S. to Discuss Ways to Ease Pain
- Bank regulators said to consider relaxing lending guidelines
- Loan prices have cratered during the coronavirus outbreak
Photographer: John Taggart/Bloomberg
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Wall Street regulators have discussed ways they could help the stressed-out leveraged-loan market, which is showing signs of a funding crunch from the pain the coronavirus is inflicting on the U.S. economy.
Officials at federal agencies have talked about relaxing lending guidelines to make it easier for banks to extend additional financing to troubled companies, said a person familiar with the matter. One option could be issuing an announcement that makes clear regulators won’t likely object to risky funding arrangements that they’ve previously frowned upon, said the person who requested anonymity because the discussions might not lead to any actions.