Federal Reserve Reestablishes Money Market Mutual Fund Liquidity Facility From the 2008 Financial Crisis and Temporary U.S. Dollar Liquidity Arrangements With Foreign Central Banks
On March 18, 2020, the Federal Reserve Board announced the establishment of a Money Market Mutual Fund Liquidity Facility (“MMLF”) to make loans available to eligible financial institutions secured by high-quality assets purchased by the financial institution from prime money market mutual funds. The MMLF will assist prime money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy. The MMLF program is structured similarly to the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (“AMLF”) that the Federal Reserve operated during the Financial Crisis, except that a broader range of assets will be eligible for purchase under the MMLF.