U.S. banks face new challenges due to second wave of COVID-19 pandemic

U.S. banks face new challenges due to second wave of COVID-19 pandemic
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Banks and financial institutions in the United States could face new challenges in the face of the second wave of the coronavirus outbreak, and the government may need more financial aid to restore the job market in the country, according to the minutes of a meeting of the Federal Reserve held in July.

“Banks and other institutions could be under pressure to receive poor results, as there is concern that an increase in Treasury debt will have implications on the market,” the minutes said.

According to the document, the risk includes the possibility of new coronavirus outbreaks, which could imply “new tensions in the credit market, as well as the loss of financial support for homes, businesses and local governments.”

In a meeting held on July 28 and 29, the directors of the central banks noted that a strong fiscal policy would be necessary to boost the United States labor market, which has only been able to add around 10 million jobs of employment in the past three months, after losing more than 21 million between March and April.

“Some participants noted that a strong fiscal policy would be necessary to boost the labor market; they also pointed out that a highly flexible monetary policy might be necessary at some point,” the minutes read.

The United States Congress approved the four stages of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that approved approximately three billion dollars to be disbursed as loans and grants to businesses, protection of the worker wages and personal assistance to qualified Americans.

President Donald Trump and his Republican Party are currently debating with their Democratic Party rivals in Congress about the scope of the next CARES law, with media reports suggesting that the package will be half the trillion dollars initially considered by both parties.