The munis and banks all have a direct IV funding line from the Federal Reserve, they mostly have absolutely nothing to worry about. The gloves are entirely off for this one, the Fed can snap up trillions of dollars in toxic mortgages if needed, they've got the greenlight across the board for any and all actions.
The Fed keeps lowering the thresholds (and they'll end up doing a lot more than that in the coming months; most of this won't be short-term credit, they'll switch it to long-term out of necessity):
"Fed expands muni-debt program to cover smaller cities, counties"
"The Federal Reserve expanded the scope and duration of the Municipal Liquidity Facility, a $500 billion emergency lending program aimed at providing short-term credit to state and local governments as they endure the economic fallout from the coronavirus pandemic. The U.S. central bank lowered the population thresholds under which counties and cities would be eligible to sell short-term debt to the facility. The new levels are at least 500,000 for counties and 250,000 for cities, down from 2 million and 1 million."
I work for a fortune 500 financial institution. After what happened during the last crash we had a policy of 365 days of liquidity. So far this time we haven't used the Fed firehose of $, but according to our CEO the Fed has asked us to start using it. I don't understand why the Fed would ask us to use something we don't need.
The Fed keeps lowering the thresholds (and they'll end up doing a lot more than that in the coming months; most of this won't be short-term credit, they'll switch it to long-term out of necessity):
"Fed expands muni-debt program to cover smaller cities, counties"
"The Federal Reserve expanded the scope and duration of the Municipal Liquidity Facility, a $500 billion emergency lending program aimed at providing short-term credit to state and local governments as they endure the economic fallout from the coronavirus pandemic. The U.S. central bank lowered the population thresholds under which counties and cities would be eligible to sell short-term debt to the facility. The new levels are at least 500,000 for counties and 250,000 for cities, down from 2 million and 1 million."
https://www.bondbuyer.com/articles/fed-expands-muni-debt-pro...