MM funds to receive guarantees

Treasury to Guarantee Money Market Funds


The Treasury Department said Friday morning that it would guarantee, at least temporarily, money market funds up to an amount of $50 billion in order to ensure their solvency.

“For the next year, the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund — both retail and institutional — that pays a fee to participate in the program,” the Treasury said in a statement .

“Money market funds play an important role as a savings and investment vehicle for many Americans,” the Treasury said in statement.

Concerns about the value of money market funds falling below $1 have exacerbated global financial market turmoil and caused severe liquidity strains.

Comment: See yesterday's posting about this - "break the buck"

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