Robust it isn’t, but there are signs that the international push to unclog the credit market is working. The Federal Reserve’s Commercial Paper Funding Facility, a.k.a. the CPFF, took off smoothly last week. The CPFF aims to restore the commercial paper market to levels seen between January 1 and August 31 of this year. The Fed buys three-month commercial paper with an A1/P1 rating from issuers; volumes are limited to the companies’ activity in the private commercial paper market during the January-August 2008 period. The private CP market is crucial to many companies for day-to-day operating expenses, and it has been essentially locked down since the middle of September.

Response to the Fed’s initiative has been strong. GMAC, Ford Credit, American Express, Harley Davidson, and many others jumped right in. Although the Fed won’t disclose the names of participants the or amounts of CP involved, Citibank Global Markets estimates that “nearly a hundred billion dollars of CP has been issued directly to the Federal Reserve in this program’s first few days of existence.”

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