The Surprising Coronavirus Request Big Banks Are Making

The coronavirus pandemic has become a global health crisis, affecting people in dozens of countries around the world. It's also had massive economic impacts, and many see the effects of the coronavirus lingering on for months or even years. With some of the biggest companies in the world having suspended their business operations and told their employees to stay home, the need for cash is greater than ever so that those businesses can pay their expenses without bringing in any revenue.

One way that companies put contingency plans in place to deal with crisis situations like this is to open revolving lines of credit. They might leave those credit lines untapped the vast majority of the time, but when they need the money, the credit lines are available to them.

Surprisingly, some of the financial institutions that offer these lines of credit -- which include the biggest banks in the world -- are reportedly pushing back somewhat on their clients drawing down their credit lines. That news might provoke fear that there actually could be systemic risk in the financial industry from coronavirus-related liquidity issues. However, as Bloomberg reports, the more likely reason involves big banks trying to make more money than they would from an ordinary credit line.

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Source Fool.com