WASHINGTON — The Federal Reserve Board said Wednesday it will allow securities lenders to participate in a program announced in October to backstop money-market mutual funds.
The program, dubbed the Money Market Investor Funding Facility, originally targeted just money market mutual funds. The central bank's move on Wednesday also opens the program to investment funds, such as government investment pools and common trust funds, that operate much like money markets.
The Fed also raised the minimum yield on assets that can be sold to the program to at least 60 basis points above the primary credit rate. Previously the minimum yield was 50 basis points.
The Fed said it took the step to ensure that the program remains a source of liquidity even while money market interest rates are very low.