The Crisis Fighters

The Crisis Fighters Central bankers used to bail out financial institutions. In a world wracked by Covid-19, they’ve doled out almost $9 trillion, some of it to a motley cast of unlikely beneficiaries. Will it ever end?

- ENDA CURRAN and RICH MILLER

When Tottenham Hotspur striker Son Heung-Min put the ball in the back of the net early in the second half against Crystal Palace in April of last year, he etched his name into history as the first player to score at his soccer club’s glistening new 62,000-seat north London home. Less than a year after his team’s triumphant 2-0 win that day, the £1 billion ($1.3 billion) stadium sat eerily empty as a corona virus lockdown brought sports, and much of normal life, to a halt across the U.K.

Then came another milestone. In June, Spurs became the first club in the English Premier League to qualify for Bank of England support. It tapped a £175 million commercial-paper facility to help cushion the estimated loss of more than £200 million in revenue from canceled matches and other events between then and June 2021

If BOE support for Spurs sounds improbable, it shouldn’t. The central bank was hardly the only one to mount extraordinary rescue operations in response to the pandemic. In less exceptional circumstances, that money would be used to bail out banks or other lenders to stave off financial contagion. With Covid-19 hammering economies, that changed this year.

For the first time in its history, the U.S. Federal Reserve bought a wide variety of corporate debt issued by blue-chip borrowers such as Apple Inc., as well as junk bonds from riskier companies. The Bank of Japan, the petri dish for central banking after more than two decades of extraordinary stimulus, launched a $940 billion package of loan support for businesses.