Financial Update (First Quarter 2009)

Fed Announces Details of Plan to Purchase Securities, Expands Funding Facility

Federal Reserve SealIn furtherance of its goal to support mortgage and housing markets and foster improvement in the condition of financial markets, the Federal Reserve has announced details of its program to purchase mortgage backed securities (MBS) and announced changes to the Money Market Investor Funding Facility (MMIFF).

Supporting housing, mortgage markets is program's goal
Under the MBS purchase program, the Federal Reserve said in late December that it will begin purchasing MBS backed by the government-sponsored enterprises Fannie Mae, Freddie Mac, and Ginnie Mae. The program was established to provide support to the mortgage and housing markets and foster improved conditions in financial markets more generally.

FAQ about the MBS purchase program off-site image
FAQ about the MMIFF off-site image

Eligible MMIFF participants expanded
The changes to the MMIFF involve expansion of the facility's eligible participants. Besides the U.S. money market mutual funds that had been eligible, the facility is now open to U.S.-based securities-lending cash-collateral reinvestment funds, portfolios, and securities lenders. U.S.-based investment funds that operate similarly to local government investment pools, common trust funds, and collective investment funds will also be permitted to participate.

January 29, 2009