U.S. Fed rolls out third emergency program to ensure liquidity in money market mutual funds

U.S. Fed rolls out third emergency program to ensure liquidity in money market mutual funds

The U.S. Federal Reserve on Wednesday announced its third emergency fiscal package to be introduced in two days.

The credit program will offer loans to banks that offer as collateral assets bought from money market mutual funds.

The newly-established facility brought through the Boston Federal Reserve will offer a so-called “support for the flow of credit to households and businesses”. The proposition will take effect by guaranteeing the $3.8 trillion market mutual funds industry the ability to sell its holdings of U.S. Treasury bonds as well as other high quality assets at full price in the event that investors would ask to withdraw their money.