Commercial Paper Funding Program - CPFP

DEFINITION of 'Commercial Paper Funding Program - CPFP'

A program instituted in October of 2008 that created the Commercial Paper Funding Facility (CPFF). The Commercial Paper Funding Program (CPFP) was designed to increase the liquidity of the commercial paper market by providing funding to issuers. The program specifically provided a backup measure of liquidity for commercial paper issuers via a Special Purpose Vehicle (SPV).

BREAKING DOWN 'Commercial Paper Funding Program - CPFP'

The SPVs were financed directly by the Federal Reserve Bank of New York and were used to purchase three-month commercial paper, both secured and unsecured. This financing was then to be secured by the assets placed into the SPVs and also by the fees paid by issuers of unsecured paper. The Treasury department felt that the program was required in order to prevent further substantial disruption of the financial markets.

RELATED TERMS
  1. Commercial Paper Funding Facility ...

    An institution created by the Federal Reserve Bank of New York ...
  2. Paper Dealer

    A market maker that buys and sells extremely short-term corporate ...
  3. Tax-Exempt Commercial Paper

    An unsecured short-term loan, usually issued to finance short-term ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
  5. Backup Line

    A line of credit used by a bank to cover any issue of commercial ...
  6. Fine Paper

    High-quality securities that are assumed to be risk free, or ...
Related Articles
  1. Managing Wealth

    Introduction To Commercial Paper

    Commercial paper is a short-term instrument that can be a viable alternative for retail fixed-income investors looking for a better rate of return on their money.
  2. Markets

    Commercial Paper

    Commercial paper is a short-term debt security issued by financial companies and large corporations. The corporation promises the buyer a return, or profit, for making the loan. The return is ...
  3. Trading

    Pros And Cons Of Paper Trading

    Most market novices should paper trade for a considerable amount of time, despite key drawbacks.
  4. Markets

    What's a Commercial Bank?

    A commercial bank is a type of financial institution that accepts deposits, offers checking account services, makes business, personal and mortgage loans; and offers basic financial products ...
  5. Personal Finance

    The Reality of Commercial Real Estate Loans

    It’s corporations and partnerships that most commonly take out commercial real estate loans.
  6. Markets

    5 Signs Of A Credit Crisis

    These indicators can illuminate the depth and severity of problems in the credit markets.
  7. Managing Wealth

    Commercial Real Estate Agent: Career Path & Qualifications

    Learn about the qualifications, skills and licensing requirements to be a commercial real estate agent and how to get started in this career path.
  8. Investing

    When Wholesale Funding Goes Bad

    The wholesale funding process is extremely dependent on the credit markets. Therefore, it is not always the best option for a business.
  9. Managing Wealth

    Commercial Real Estate Agent: Job Description & Average Salary

    Learn more about the qualifications, daily and regular responsibilities, and average yearly salaries of commercial real estate agents.
  10. Managing Wealth

    Career Advice: Investment Banking Vs. Commercial Banking

    Read an in-depth review of the differences between a career in investment banking and a career in commercial banking, including how to decide between them.
RELATED FAQS
  1. How can retail investors invest in commercial paper?

    Find out how individual retail investors can purchase short-term commercial paper, but why it rarely makes good investment ... Read Answer >>
  2. Can a business ever be too small to issue commercial paper?

    See why market forces regulate the size of companies that issue commercial paper, even though there are no official regulations ... Read Answer >>
  3. Can retail investors buy commercial paper?

    Find out whether retail investors buy commercial paper, and learn about the restrictions that often prevent individual investors ... Read Answer >>
  4. What happens when a company defaults on its commercial paper obligations?

    Read about the possible consequences of a large corporation defaulting on its commercial paper obligations even though the ... Read Answer >>
  5. What are some examples of securities that can be found in a money market fund?

    Learn about examples of securities found in money market accounts. These securities need to be safe, liquid and of short-term ... Read Answer >>
  6. What are some examples of money market funds?

    Learn more about different types of money market mutual funds, including those that invest in government paper versus commercial ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center