The spread of COVID-19 and the global response to it have severely disrupted economic activity and heightened uncertainty. Asset price volatility and fears of financial turmoil have also emerged, further clouding the outlook. Central banks’ experience before and during the 2007–09 Great Recession suggests that they have ample tools to support the economy in the face of such risks. Financially healthy businesses are essential to keeping the economy running and avoiding a protracted recession. We focus here on what monetary policy can do to aid the economy should worsening financial conditions cause companies to invest ... (full story)