Money Market Investor Funding Facility - MMIFF

AAA

DEFINITION of 'Money Market Investor Funding Facility - MMIFF'

A facility created by the Federal Reserve board on November 24, 2008, in an effort to stimulate institutional investors to assume investments that have longer terms. The Money Market Investor Funding Facility (MMIFF) is designed to support a private sector initiative to provide liquidity to money market investors. Financial crisis fears caused an influx of institutional investors to assume overnight positions toward the end of 2008, placing a strain on short-term debt markets. Funding is provided by the Federal Reserve Bank of New York through special purpose vehicles (SPVs).

INVESTOPEDIA EXPLAINS 'Money Market Investor Funding Facility - MMIFF'

Eligible investors can sell assets worth no less than $250,000 (such as commercial paper and certificates of deposit (CDs)) with maturities between seven and 90 days to the SPV. The SPV then borrows from the MMIFF and sells asset-backed commercial paper (ABCP) in order to fund the purchase of these assets. The Federal Reserve Bank of New York is repaid by the SPVs as the assets mature.

As of February 3, 2009, the MMIFF is authorized to lend a maximum of $600 billion in assets to five SPVs, $540 billion of which is to be funded by the Federal Reserve.

RELATED TERMS
  1. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  2. Asset-Backed Commercial Paper - ...

    A short-term investment vehicle with a maturity that is typically ...
  3. Broke The Buck

    When a money market mutual fund's net asset value (NAV) drops ...
  4. Breaking The Buck

    When the net asset value (NAV) of a money market fund falls below ...
  5. Primary Dealer Credit Facility ...

    An institution created by the Federal Reserve to provide overnight ...
  6. Commercial Paper Funding Facility ...

    An institution created by the Federal Reserve Bank of New York ...
Related Articles
  1. How Is Europe Affecting The Martkets?
    Economics

    How Is Europe Affecting The Martkets?

  2. What are the main components of the ...
    Economics

    What are the main components of the ...

  3. What's the lowest year-over-year inflation ...
    Investing Basics

    What's the lowest year-over-year inflation ...

  4. What's the highest year-over-year inflation ...
    Personal Finance

    What's the highest year-over-year inflation ...

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center