Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF)
The Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF) was created by the Federal Reserve in 2008 to provide liquidity to money market mutual funds. The facility was designed to help money market mutual funds meet redemption requests from investors and maintain the stability of the financial system. The AMLF was created in response to the financial crisis of 2008, when money market mutual funds experienced large outflows of funds due to investor concerns about the safety of their investments.
History of the AMLF
The AMLF was created in September 2008 as part of the Federal Reserve’s response to the financial crisis. The facility was designed to provide liquidity to money market mutual funds, which had experienced large outflows of funds due to investor concerns about the safety of their investments. The AMLF allowed money market mutual funds to borrow from the Federal Reserve at a low interest rate, providing them with the liquidity they needed to meet redemption requests from investors. The facility was closed in February 2010, after the financial crisis had passed and money market mutual funds had regained their stability.
Comparison of AMLF and Other Money Market Mutual Fund Facilities
| Facility | Interest Rate | Maximum Loan Amount |
|---|---|---|
| AMLF | 0.50% | $50 billion |
| Term Auction Facility | 1.00% | $100 billion |
| Primary Dealer Credit Facility | 1.00% | $200 billion |
Summary
The Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF) was created by the Federal Reserve in 2008 to provide liquidity to money market mutual funds. The facility was designed to help money market mutual funds meet redemption requests from investors and maintain the stability of the financial system. The AMLF allowed money market mutual funds to borrow from the Federal Reserve at a low interest rate, providing them with the liquidity they needed to meet redemption requests from investors. The facility was closed in February 2010, after the financial crisis had passed and money market mutual funds had regained their stability. For more information about the AMLF, please visit the Federal Reserve’s website.
See Also
- Money Market Mutual Funds
- Term Auction Facility
- Primary Dealer Credit Facility
- Federal Reserve
- Financial Crisis of 2008
- Liquidity
- Asset-Backed Securities
- Commercial Paper
- Investor Confidence
- Redemption Requests
