N.Y. Fed to finance money market fund buys

Nov 11, 2008 @ 11:48 am

By Sue Asci

The New York Federal Reserve Bank on Nov. 24 will begin funding five special-purpose vehicles to finance the purchase of certain assets from money market mutual funds through its Money Market Investor Funding Facility program.

The goal is to improve liquidity in short-term funding markets, the bank said in a statement.

The program, authorized Oct. 21, provides loans for the purchase of U.S.-denominated certificates of deposit, bank notes and commercial paper issued by highly rated financial institutions.

The investments must have remaining maturities of no fewer than seven days and no more than 90 days.

The loans will be offered through the financing vehicles managed by JPMorgan Securities, a division of JPMorgan Chase & Co. of New York.

The program authorizes a maximum purchase amount of $600 billion in eligible assets of 50 institutions.

As the New York Federal Reserve will provide 90% of the financing, the bank’s lending may total $540 billion.

The Federal Reserve will charge the primary credit discount rate.


What do you think?

View comments

Recommended next


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print