Asset-Backed Commercial Paper Money Market Fund (ABCP MMMF) Liquidity Facility ("AMLF") (Fed)

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Asset-Backed Commercial Paper Money Market Fund (ABCP MMMF) Liquidity Facility (“AMLF”) (Fed)

Under the AMLF, the Federal Reserve made below-market loans to banks and bank holding companies to purchase corporate debt from money market funds in order to ensure the funds had necessary liquidity.

Wall Street Bailout Accounting
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ASSET-BACKED COMMERCIAL PAPER MONEY MARKET FUND (ABCP MMMF) LIQUIDITY FACILITY (“AMLF”) (FED)
Balance Sheet
Disbursed*: $145.9B [1]
Current outstanding: $0 [2]
Public Funds
Maximum at-risk: At least $145.9B [3]
Current at-risk: $0 [4]

* See the methodology and glossary for definitions of "disbursed," etc.



Funding agency and aid type

The funding agency was the Federal Reserve.

Below-market loans to finance purchases of corporate debt.

Who benefits

Banks and mutual fund firms.

Background

Notes

The AMLF began operations on Sept. 22, 2008 and was terminated on Feb. 1, 2010. Lending crested on Oct. 8, 2008 at $145.890 billion.[5]

SIGTARP:[6]

“Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (“AMLF”) — Total Potential Support: At Least $145.9 Billion The Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (“AMLF”) is designed to assist money market funds that hold asset-backed commercial paper (“ABCP”). Through the facility, the Federal Reserve provides non-recourse loans at the primary credit rate to U.S. depository institutions and bank holding companies to finance their purchases of high-quality ABCP from money market mutual funds. According to the Federal Reserve, AMLF is intended “to assist money funds that hold such paper in meeting demands for redemptions by investors and to foster liquidity in the ABCP markets and broader money markets.” The AMLF was initially authorized on September 19, 2008, and although originally scheduled to terminate in January 2009, has been subsequently extended by the Federal Reserve Board to February 1, 2010.”

Via Prins:[7]

“Eligible borrowers include all U.S. depository institutions, U.S. bank holding companies (parent companies incorporated in the U.S. or their U.S. broker-dealer subsidiaries), or U.S. branches and agencies of foreign banks. Eligible borrowers may borrow funds from the AMLF in order to fund the purchase of eligible ABCP from a money market mutual fund (MMMF) under certain conditions.”

Prins:[8]

“The Asset-Backed Commercial Paper (ABCP) Money Market Mutual Fund (MMMF) Liquidity Facility provides loans to financial institutions purchasing commercial paper from money market mutual funds. According to SIGTARP, the Fed allocated $145.9 billion for the program in 2009.”

Articles and resources

Related SourceWatch articles

References

  1. Federal Reserve Bank of St. Louis, “Series: WABCMMF - Reserve Bank Credit - Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility,”[ http://www.research.stlouisfed.org/fred2/data/WABCMMF.txt]March 12, 2010.
  2. Federal Reserve Bank of St. Louis, “Series: WABCMMF - Reserve Bank Credit - Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility,”[ http://www.research.stlouisfed.org/fred2/data/WABCMMF.txt]March 12, 2010.
  3. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), “Quarterly Report to Congress – July 21, 2009,”[ http://www.sigtarp.gov/reports/congress/2009/July2009_Quarterly_Report_to_Congress.pdf] p. 144.
  4. Board of Governnors of the Federal Reserve, “Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility,”[1] accessed Feb. 21, 2010.
  5. Federal Reserve Bank of St. Louis, http://www.research.stlouisfed.org/fred2/data/WABCMMF.txt and http://www.research.stlouisfed.org/fred2/series/WABCMMF accessed Feb. 21, 2010.
  6. SIGTARP July 2009 report, p. 144.
  7. Board of Governors of the Federal Reserve System, “Federal Reserve Board Announces Two Enhancements to its Programs to Provide Liquidity to Markets”, press release, September 19, 2008; Board of Governors of the Federal Reserve System, “Factors Supplying Reserve Balances: Detail for Loans”, H.41 Table 6, June 25, 2009; The Federal Reserve Bank, Asset Backed Commercial Paper (ABCP) Money Market Mutual Fund (MMMF) Liquidity Facility (AMLF or “the Facility”), Discount Window & Payment Risk Website, http://www.frbdiscountwindow.org/mmmf.cfm (accessed September 10, 2009).
  8. Prins’ Mother Jones analysis. Dec. 21, 2009. http://motherjones.com/politics/2009/12/behind-real-size-bailout

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