September 18, 2009
Treasury winds down money market program
The U.S. Treasury Department said it would end its guarantee program for money market funds Friday, as it anticipated.
The program was established after the Reserve Primary Fund's share values fell below $1 a year ago following the collapse of Lehman Brothers.Such an incident, which had happened only once before, is known as breaking the buck.
The Treasury said it had lost no money on the guarantee program, and had earned $1.2 billion in fees.
As the risk of catastrophic failure of the financial system has receded, the need for some of the emergency programs put in place during the most acute phase of the crisis has receded as well, said Treasury Secretary Tim Geithner in a statement.
The Guarantee Program for Money Market Funds served its purpose of adding stability to the money market mutual fund industry during market disruptions last fall and ultimately delivered a healthy return to taxpayers, he said.