U.S. Fed moves to ensure liquidity in money market mutual funds

U.S. Fed moves to ensure liquidity in money market mutual funds

WASHINGTON (Reuters) – The U.S. Federal Reserve on Wednesday night rolled out its third emergency credit program in two days, announcing it would make loans to banks that offer as collateral assets purchased from money market mutual funds.

The new facility through the Boston Federal Reserve bank will offer “support for the flow of credit to households and businesses” by ensuring the $3.8 trillion money market mutual fund industry can sell its holdings of U.S. Treasury bonds and other high quality assets at full value if investors ask to withdraw their cash.

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