Fed upsizes economic relief, IMF sees worst downturn since Depression, and scandal adds scrutiny to Chinese listings: This Week in Finance

Welcome to This Week in Finance, your weekly roundup of the conversations trending among financial professionals on LinkedIn. Click Subscribe above to be notified of each edition. This week:

Fed unveils $2.3T lending program

The Federal Reserve released fresh details about its new Main Street lending programs to help shore up the economy and support small and midsize companies and local governments. The $2.3 trillion effort will see the Fed work through banks to offer four-year loans of at least $1 million to companies with up to 10,000 workers and $2.5 billion in revenue. It will also directly buy the bonds of states, counties, and cities. The news precipitated Wall Street's best week since 1974 and comes on top of the White House's $2 trillion relief package. ?? Here's what people are saying.

• Wells Fargo unshackled for lending: The Fed removed a cap on the lender's assets so that it can participate in the small business lending programs aimed at supporting hobbled enterprises during the coronavirus pandemic.
• Govt mulls further small biz relief: Treasury Secretary Steven Mnuchin said he is working to replenish the government's small business lending program as enterprises rush to apply, stretching federal agencies thin and frustrating some business owners.
• 6.6 million more claim unemployment: The dramatic, unprecedented rise in unemployment claims comes as the U.S. continues to battle the pandemic by shuttering businesses and telling people to stay at home.

Dimon: 'Bad recession' is coming

Jamie Dimon, the chief executive of the biggest U.S. bank, said he expects the coronavirus pandemic to inflict "a bad recession" and financial stress similar to that of the global crisis of 2008. The JPMorgan CEO wrote in his annual letter to shareholders that his bank won't be immune to the downturn. Dimon's comments came as the International Monetary Fund declared a global recession underway that will be worse than the 2008 crisis, and as economists say the data required to "reopen" the economy is not yet available. ?? Here's what people are saying.

• One-quarter of U.S. economy wiped out: Daily output slumped by 29% compared with the first week of March, according to Moody's Analytics.

Europe agrees on €500B rescue deal

European finance ministers agreed to a €500 billion economic rescue package for countries hit hard by the coronavirus pandemic. The measures are aimed at helping governments cover health-care costs and assisting businesses in obtaining credit. But ministers did not reach an agreement on recovery measures needed post-crisis, in particular controversial Eurobonds or ‘coronabonds,’ with the European Central Bank saying the bloc may need up to €1.5 trillion to tackle the crisis. ?? Here's what people are saying.

• IMF sees worst downturn since Depression: The International Monetary Fund, doubling its emergency loan capacity, predicted that the pandemic will produce the worst recession since the Great Depression.

Global trade could drop by third: WTO

According to the World Trade Organization, global trade is expected to drop 13% to 32% this year due to the coronavirus pandemic — dealing a larger blow to international commerce than the 2008 financial crisis. The WTO predicts a rebound in global goods trade of between 21% and 24% in 2021, while noting the exact figure will depend on the duration of the virus outbreak and the success of policy responses. ?? Here's what people are saying.

OPEC deal to cut output hits bump

Mexico stalled passage of a deal to cut oil output by OPEC, insisting on a smaller contribution to what would be the biggest-ever reduction by the cartel. Saudi Arabia and other members, plus Russia, have agreed to rein in production by almost a quarter each to revive a market leveled by the impact of the coronavirus pandemic on economic activity. The total proposed cut of about 10 million barrels a day in May and June would equal 10% of global supply. ?? Here's what people are saying.

Investor ire over $310M in fake sales

Doubts over the veracity of financial reporting by Chinese-based firms are being raised after coffee chain Luckin Coffee revealed that its COO fabricated 2019 sales figures by $310 million. High-profile investors BlackRock, GIC, and Louis Dreyfus had backed the chain that aimed to challenge Starbucks, but shares have plummeted 81% in U.S. trading. Some experts call it a “wake-up call” for U.S. policymakers, regulators, and investors about the risk of China-based companies to the U.S. market, with Bloomberg reporting it may lead to a temporary freeze on new U.S. listings by Chinese firms. ?? Here's what people are saying.

Insurers cut drivers a break

Some auto insurers are refunding policyholders as stay-home orders result in fewer accident claims. Allstate is refunding $600 million in payback checks, while American Family Mutual Insurance will return $200 million to policyholders. The moves come as American Family estimates that people drove 40% fewer miles in the U.S. during the last three weeks of March amid the coronavirus contagion. ?? Here's what people are saying.

Are shareholders most important?

The coronavirus crisis may bring the practice of "shareholder primacy" — or companies' prioritization of their owners above all else — closer to an end. That's the message from advocates such as Just Capital's Martin Whittaker and ex-Unilever CEO Paul Polman, who say the pandemic makes clear that income and wealth inequality enabled by traditional capitalism must end. The crisis is also forcing business leaders to ensure that "corporate social responsibility" initiatives deliver measurable value rather than just check a box for appearances' sake, Bloomberg reported. ?? Here's what people are saying.

Chart of the Week: Wall Street forecasts diverge

—With Riva Gold, Andrew Seaman, Monica Fike, Andrea Beattie, Pieter Cranenbroek, Cate Chapman, and Vrushank Nayak.

Don't miss each edition of This Week in Finance: Click Subscribe above or below to be notified.