Geithner ends money market guarantee programme

US Treasury secretary Timothy Geithner said an emergency programme that had guaranteed as much as 3 trillion in assets in money market mutual funds was being allowed to expire Friday.

As the risk of catastrophic failure of the financial system has receded,the need for some of the emergency programs put in place during the most acute phase of the crisis has receded as well, he said. The secretary had said last week that the financial system was healthy enough to begin unwinding some of the programs put in place a year ago after the collapse of Lehman Brothers triggered the worst financial crisis in seven decades.

The programme to guarantee assets in money market mutual funds had originally been established in September 2008 to last for three months but was then extended through September 18 of this year.

The Treasury said it had suffered no losses under the guarantee program and had earned about 1.2 billion in participation fees paid by money market mutual funds. The programme had been established after a large money market fund called the Reserve Primary Fund broke the buck.