The Treasury's Money Market Fund Guarantee Program
is about to end. The Associated Press
' Martin Crutsinger reports
that the Obama administration plans to close the program according to schedule on September 18.
The Treasury Department said that the program earned $1 billion in fees from the mutual fund industry and that it had no direct cost to taxpayers. The program earned money by charging funds a fee for a federal guarantee of their share price. Fees ranged from 1 basis point to 2.3 bps depending on share price. According to the AP, the program guaranteed $3 trillion in money market funds at one point.
The program began on September 19, 2008, three days after the Reserve Primary Fund
shares fell under $1, thereby “breaking the buck.” It was originally set to expire in December of that year.
The program was then extended until April, and it was extended again until September 18.
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