NCUA Approves Request To Short-Sell Treasuries

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The NCUA Board has approved a pilot investment program that will allow Bank Fund Staff FCU to sell Treasury securities. The program will allow the $2 billion credit union to bet on rising interest rates.

With short selling, an investor sells securities he or she doesn't own, with an agreement to deliver the securities at a pre-arranged price. If interest rates go up, short-sellers in the Treasury market, will make money. Short-selling is a permitted activity under the Federal CU Act, but not under NCUA's rules and regulations. NCUA will be posting standards for the short-selling program on its website.

Ed Roberts can be reached at robertscuj (c) 2006 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.

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