Fed starts financing money market funds
US Congress overrules Dodd-Frank clause at Treasury request as Fed brings in sweeping measure
The US Federal Reserve has established a new facility to lend indirectly to money market mutual funds, triggering US Congress to suspend a clause of the Dodd-Frank Act designed to protect taxpayers.
Through the facility, the Money Market Mutual Fund Liquidity Facility (MMLF), the Federal Reserve Bank of Boston will provide loans to banks that are secured by certain assets that the banks have purchased from money market funds.
The Fed’s aim is to assist money market funds in meeting demands for
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