US Fed pop up $3 trillion money-market fund

WASHINGTON: The federal government has stepped in to bolster the teetering $3 trillion money-market mutual fund industry and stem a wave of withdrawals that resembled a Depression-era run on the banks.

The Treasury Department said Friday it will tap into a $50 billion fund created during the Depression and temporarily provide guarantees for the popular investment products, held in some 38 million accounts that enable investors to see modest returns while keeping cash readily available if needed.

Providing additional support, the Federal Reserve took steps to back typically safe commercial short-term lending that underlies fund assets.

The moves have been criticized as risky by the American Bankers Association.