MNI: Fed Sets Up Money Mkt Mutual Fund Liquidity Facility: Txt

     WASHINGTON (MNI) - The following is the text of a Federal Reserve release

late Wednesday, as it looks to broaden support for the flow of credit to the

economy:

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     Federal Reserve Board broadens program of support for the flow of credit to

households and businesses by establishing a Money Market Mutual Fund Liquidity

Facility (MMLF) 

     The Federal Reserve Board on Wednesday broadened its program of support for

the flow of credit to households and businesses by taking steps to enhance the

liquidity and functioning of crucial money markets. Through the establishment of

a Money Market Mutual Fund Liquidity Facility, or MMLF, the Federal Reserve Bank

of Boston will make loans available to eligible financial institutions secured

by high-quality assets purchased by the financial institution from money market

mutual funds.

     Money market funds are common investment tools for families, businesses,

and a range of companies. The MMLF will assist 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 attached term sheet details the types of assets, including unsecured

and secured commercial paper, agency securities, and Treasury securities, that

are eligible, as well as additional information. The MMLF program will purchase

a broader range of assets, but its structure is very similar to the Asset-Backed

Commercial Paper Money Market Mutual Fund Liquidity Facility, or AMLF, that

operated from late 2008 to early 2010. The MMLF is established by the Federal

Reserve under the authority of Section 13(3) of the Federal Reserve Act, with

approval of the Treasury Secretary. The Department of the Treasury will provide

$10 billion of credit protection to the Federal Reserve in connection with the

MMLF from the Treasury's Exchange Stabilization Fund.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMUFE$,M$U$$$]