Treasury Announces Expiration of Guarantee Program for Money Market Funds. The release, issued this morning, is subtitled, "Program Winds Down as anticipated, Generates $1.2 billion in participation fees for U.S. Taxpayers." It says, "The U.S. Department of the Treasury today announced that the Guarantee Program for Money Market Funds will expire today. The Program was initially established for a three-month period that could be extended up through September 18, 2009. Since inception, Treasury has had no losses under the Program and earned approximately $1.2 billion in participation fees." Treasury Secretary Tim Geithner says, "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. 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." The release also says, "Treasury designed the Program to stabilize markets after a large money market fund's announcement that its net asset value had fallen below $1 per share ("broke the buck") in the wake of the failure of Lehman Brothers in September of 2008. Maintaining confidence in the money market mutual fund industry was critical to protecting the integrity and stability of the global financial system." See also, Bloomberg's "Treasury Closes Money-Fund Insurance a Year After Run", which quotes Peter Crane, "This will be the first big test for whether the market has truly improved.... Funds will easily pass the test."
