Money Market Investor Funding Facility - MMIFF

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).

BREAKING DOWN '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.