Regulatory Alerts2020-03-23 | 2020-06156Regulatory Capital Rule: Money Market Mutual Fund Liquidity Facility
The Federal Reserve Board, OCC, and FDIC issued an interim final rule to neutralize regulatory capital requirements for banking organizations participating in the Money Market Mutual Fund Liquidity Facility (MMLF). The regulation permits these institutions to exclude non-recourse exposures acquired through the MMLF from their total leverage exposure, average consolidated assets, and risk-weighted asset calculations. By eliminating the capital penalty for purchasing eligible collateral from money market mutual funds, the rule alleviates liquidity pressures on MMFs and helps stabilize financial markets amid the COVID-19 pandemic.
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