Law360 (October 28, 2020, 7:11 PM EDT) — The lessons learned in the global financial crisis of 2008 allowed Congress and financial regulators to move faster and with more precise measures to boost a wavering economy brought on by the coronavirus pandemic, a panel of legal experts said Tuesday.

Attorney Thomas Baxter Jr., who was general counsel of the Federal Reserve Bank of New York during the financial crisis, said one important element of both emergency situations was the “healing power” of the special purpose vehicle, a legal entity that acts as a funding structure for businesses in need.

The Fed typically forms such an entity as a Delaware limited liability corporation and uses it to move money from its programs to distressed companies.

In 2008, different LLCs bought assets from Bear Stearns and AIG and later resold them. And earlier this year, the Fed created vehicles to move loans from a primary market credit facility to large corporations, as well as loans to smaller businesses through its Main Street Lending Program. Terms of the deals vary with each vehicle.

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