Fed to help money market mutual funds

WASHINGTON, Oct. 21 (UPI) -- The U.S. Federal Reserve said Tuesday it would create a Money Market Investor Funding Facility to restore liquidity in money market mutual funds.

In purchasing dollar-denominated certificates of deposit and commercial paper with 90 days or less to maturity, the new facility, "should improve the liquidity position of money market investors, thus increasing their ability to meet any further redemption requests," the Fed said in a statement.

The short term money market has traditionally been a conservative, low risk investment, but even that market has struggled lately.

"Improved money market conditions will enhance the ability of banks and other financial intermediaries to accommodate the credit needs of businesses and households," the Fed said.