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Board of Governors of the Federal Reserve System
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Current FAQs
Informing the public about the Federal Reserve

Why doesn't the Federal Reserve lend to state and local governments?

The Federal Reserve has very limited authority to provide financial assistance to state or local governments. The Fed believes that because this type of activity inherently involves political considerations, the Congress and the Administration are better suited to make decisions and take actions that would provide assistance to state and local governments.

Related Information


Chairman Ben S. Bernanke

March 2, 2011

Related Questions

Last update: December 16, 2015