U.S. Treasury to end special financing program

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U.S. Treasury to end special financing program
from MarketWatch.com - MarketPulse
NEW YORK (MarketWatch) -- The Treasury Department said Thursday that it will end its supplementary financing program with the Federal Reserve to preserve its flexibility as the country nears the current debt ceiling. The move will effectively put more excess reserves into the banking system, a Treasury official said. The government had been issuing the short-term bills to deposit proceeds at the Fed to help the central bank manage its monetary policy. As the current bills mature, they will not be rolled over, letting the account dwindle to about $5 billion from about $200 billion. The U.S. has about $14.015 billion in outstanding debt subject to the debt limit of $14.294 billion. Earlier this month, Treasury Secretary Timothy Geithner said the U.S. could hit that debt ceiling as early as the end of March, or at least by mid-May. Last year, the Treasury Department expanded the SFP program after Congress increased the debt limit.
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