Municipal liquidity facility Step1: The Federal Reserve enacted the special purpose vehicles (SPV) as an LLC and cannot be categorized into any of the following consolidated guidance based on the ASC 10 of scope exception. Therefore, it cannot be classified as government organization, employee benefit plans, money market funds and specific investment firms. Since the […]
Accounting policies and internal control The parties involved include the treasury, the federal reserve and the entity. The MLF LLC is financed using credit obtained from the FRBNY on the basis of recourse. The acquisition of debt involved purchase of debt on the LLC based on the financial status of the issuer and debt prepayment […]
Before December 2020, the Municipal Liquidity Facility (MLF) could purchase up to $500 billion in three-year-maturity government and public entity notes. The Federal Reserve has established a separate corporation that handles sales for the system to work. The MLF uses a competitive auction as a safety net in a shortage of demand for its loans. […]