Fed Adds to Its Efforts to Aid Credit Markets

For decades, Americans have considered money-market mutual funds as safe as bank accounts. On Tuesday, the Federal Reserve pledged $540 billion to make sure they really are.

In another bold gambit to restore confidence in the financial system, the Fed announced that it would provide a backstop for the short-term debt that many money-market funds hold. The central bank will buy certificates of deposit and certain types of commercial paper from the funds, in hopes of restoring the free flow of credit and easing worries about the investments. It is the third program of its kind that the Fed has announced this month.

Read Full Article from New York Times

- Posted: 2008-10-22 09:09:50

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