Money Market Mutual Fund Liquidity Facility
Date:
September 19, 2008
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Loans
Maximum Amount:
$145.89 billion Establishment of Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility to allow Federal Reserve to increases market liquidity by purchasing three month unsecured and asset-backed commercial paper directly from selected corporate issuers.
As has been previously announced, the Fed closed this program on February 1, 2010, along with three other Fed lending facilities that were created in response to the economic and financial crisis: Term Securities Lending Facility, Commercial Paper Funding Facility, and the Primary Dealer Credit Facility.
Notes:
Amount spent indicates outstanding loans as of 10/21/2009 (http://www.federalreserve.gov/releases/h41/Current/). Facility maximum lending amount is unlimited, but never exceeded $416 billion. Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.