WASHINGTON: The Federal Reserve could lend as much as $540 billion in a new facility aimed at restoring liquidity for money market mutual funds, senior Fed officials said on Tuesday.
Five special purpose vehicles set up under the new facility would be authorized to fund up to $600 billion in assets, the officials told reporters. The Fed would provide senior financing up to 90 percent. JPMorgan Chase is the sponsor and manager of the conduits, an official said. Earlier, the Fed launched a new facility to fund purchases of certificates of deposit and commercial paper from money market mutual funds in the latest step to provide liquidity to strained financial markets. "By facilitating the sales of money market instruments in the secondary market, the MMIFF (Money Market Investor Funding Facility) should improve the liquidity position of money market investors, thus increasing their ability to meet any further redemption requests and their willingness to invest in money market instruments," the Fed said in a statement. The New York Fed will provide senior secured funding to a series of special purpose vehicles to finance purchases of certificates of deposit and commercial paper from US money market mutual funds and others, the central bank said. Eligible assets include dollar-denominated CDs and commercial paper issued by highly rated financial institutions and having remaining maturities of 90 days or less. Eligible investors include US money market mutual funds but may over time include other US money market investors, the Fed said. http://economictimes.indiatimes.com/Fed_could_lend_up_to_540_bn_in_money_mkts/articleshow/3624818.cms Fear is not the natural state of civilized people. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
