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Municipal Liquidity Facility (Federal Reserve Policy Tools)

Summary

Federal Reserve Board policy tools page on the Municipal Liquidity Facility, established to help state and local governments manage cash flow pressures. It states that the facility was designed to purchase up to $500 billion of short term notes directly from U.S. states, counties with a population of at least 500,000 residents and cities with a population of at least 250,000 residents. It states that the facility ceased purchasing eligible notes on December 31, 2020. It links a letter from Chair Powell to Secretary Mnuchin dated November 20, 2020 and reports to Congress, and shows a last update of January 11, 2024.

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“Municipal Liquidity Facility (Federal Reserve Policy Tools).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/federal-reserve-board-municipal-liquidity-facility-48cd0c3666/, SHA-256 45572923284bcb62471e6d0bd36ec4a011667b4b17f0bf4fb8edafe0d010676e.

Full text

Board of Governors of the Federal Reserve System

Policy Tools

Municipal Liquidity Facility

The Federal Reserve established the Municipal Liquidity Facility to help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities. The facility was designed to purchase up to $500 billion of short term notes directly from U.S. states (including the District of Columbia), U.S. counties with a population of at least 500,000 residents, and U.S. cities with a population of at least 250,000 residents. Eligible state-level issuers were able to use the proceeds to support additional counties and cities. In addition to the actions described above, the Federal Reserve will continue to closely monitor conditions in the primary and secondary markets for municipal securities and will evaluate whether additional measures are needed to support the flow of credit and liquidity to state and local governments. The Municipal Liquidity Facility ceased purchasing eligible notes on December 31, 2020.

Letter from Chair Powell to Secretary Mnuchin regarding emergency lending facilities (November 20, 2020)

Reports to Congress

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2023 Reports

2022 Reports

2021 Reports

2020 Reports

Related Press Releases

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Last Update: January 11, 2024

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