The fed has launched a program to support mutual investment funds money market

the Federal reserve expanded its program to maintain the flow of credit to households and businesses, taking measures to support the operation of mutual funds the money market. This was reported on the website of the regulator.

With the new mechanism (Money Market Mutual Fund Liquidity Facility, MMLF) loans will be granted for up to one year to financial institutions, which serve as high-quality assets such as US Treasury bonds purchased from mutual funds money market.

the Loans will be granted through the Federal reserve Bank (FRB) of Boston.

the Us Central Bank actually encourages banks to buy assets from such funds, saving funds from having to sell assets at a discount, if they feel pressure from the households and businesses wishing to withdraw money, Reuters notes.

money market Funds are common investment instruments for households and enterprises. However, they are not insured like Bank deposits, Federal Corporation on insurance of contributions.

the fed will exclude any assets acquired from mutual funds money market from regulatory capital requirements. This will give the banks another incentive to purchase the assets of the funds as required.

on Sunday the fed’s emergency rate cut the fed funds to 0-0. 25%. The regulator also announced the launch of asset purchase program to $ 700 billion to mitigate the economic consequences of a pandemic COVID-19.