The Federal Reserve has started pulling back from backing the entire financial establishment.
Treasury Announces Expiration of Guarantee Program for Money Market Funds
Program Winds Down as anticipated, Generates $1.2 billion in participation fees for U.S. Taxpayers
The U.S. Department of the Treasury today announced that the Guarantee Program for Money Market Funds (the "Program") 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.
"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. "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."
as far as I know
the money market funds are fairly stable, so this makes sense to me and really won't affect much, it was a "confidence" thing when the rates went negative right after the Lehman Brothers collapse.
banks setting up private "guarantee" money market fund bank
Bloomberg:
On surface this sounds pretty damn responsible of them...at least. although that "emergency support" I'd like to hear more but pooling resources for a small "insurance" fee to make sure that doesn't happen again, sure sounds better than forcing the Fed to step in and guarantee all money market funds on first pass read.