The most affected segment of the American economy is left without financial support from the state.
This was reported by the Bloomberg agency.
According to media reports, the presidential administration tried to provide financial assistance to the oil industry, but was faced with bureaucratic obstacles.
Back in early April, Jerome Powell, a member of the Board of Governors of the US Federal Reserve System, stated that the Fed rejects loan programs aimed at a specific industry, considering them to be a distribution of loans.
Many American companies with high leverage – the ratio of borrowed to own capital – were at risk even before the crown crisis, which led to a drop in demand for raw materials. The oil war that unfolded later completely undermined their ratings. It is this fact that deprives them of a chance to get loans under the state aid program for $ 2.2 trillion.
The Fed is considering the checkpoint on March 22, and only those companies that at that time had an investment rating of at least “BBB-” could receive a loan. Ratings below this level are already considered to be dangerous for investment. The problem is that by March 22, the US oil sector had completely collapsed.
“Not only have enterprises and financial markets already been shocked by the COVID-19 pandemic before March 22, but oil and gas companies were affected by increased financial pressure after the OPEC + meeting on March 6, 2020, when production cuts in response to COVID-19 did not managed to be implemented, ” the Republican Party representatives wrote in a letter to Finance Minister Stephen Mnuchin.
Eric Milito, head of the National Oceanic Industry Association, in turn, emphasized that without serious financial support, “hundreds of thousands of jobs in the marine energy sector could disappear.”