Fed moves to ease commercial paper strains

US Federal Reserve building

The Federal Reserve announced that it will be stepping in to soothe liquidity strains in the commercial paper market by reviving its crisis-era Commercial Paper Funding Facility (CPFF).

The CPFF enables the Fed to provide funding to a special purpose vehicle (SPV), which purchases the unsecured and asset-backed commercial paper. The intention is to provide a liquidity backstop to issuers of commercial paper.

The last time this measure was used was in October 2008, to act as a lender-of-last

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