Following Established Processes Helped FRB New York and the Board Reduce Risks Associated With Lending Facility Contracts

The Federal Reserve Bank of New York contracted with vendors to operate certain emergency lending facilities supporting businesses and state and local governments during the COVID-19 pandemic. We assessed the Federal Reserve System's vendor selection and management processes for lending facilities operated by FRB New York.

FRB New York generally followed established processes for selecting and managing vendors, while the Board provided oversight. Doing so helped foster transparency and consistency, mitigate risks and conflicts of interest, and confirm that expected services were delivered. In January 2023, FRB New York took additional steps to reduce risks associated with future lending facility contracts by clarifying the vendor selection processes and identifying lessons learned applicable to lending facility acquisitions.