Apollo Global Management co-founder Marc Rowan sent a letter to the firm’s investors last weekend. He argues the Fed must take drastic measures to stop the economy from collapsing.

Marc Rowan on the U.S. Economy

He said in the note that without new liquidity in the US economy, “Jobs and payroll will not be preserved or able to restart quickly once the virus subsides. The status quo will be upended and the economy in a shambles rather than being preserved for a restart.”

Rowan suggested that Fed reactivate the Term Asset-Backed Securities Loan Facility or TALF. He called for TALF to expand to include a wider array of assets to participate. Officials reauthorized TALF as part of the stimulus program passed; however, it remains inactive.

When it launches, it will offer cheap loans with bundles of securities as collateral to provide liquidity to the financial market. The securities accepted for collateral must include asset-backed securities backed loans on credit cards, auto loans, or small business loans. They may also have the highest possible credit rating.

In his letter, Rowan suggests that TALF widen the range of acceptable securities to include”all investment-grade” or relatively safe market participants. This would include mortgages and commercial real estate, certificates of deposit, and many other types of assets.

Rowan warns that the economic consequences of not using a broadened TALF to provide additional liquidity will hurt make the economy much worse than it needs to be in the aftermath of COVID-19 shutdown.

Recent: Private Equity: Count Vanguard in as a Competitor in the Space