Exchange Stabilization Fund
The Exchange Stabilization Fund ( ESF ) is a United States Treasury Department fund that is typically used for exchange rate interventions . This gives the US government the ability to directly influence exchange rates without affecting the domestic money supply .
The ESF was established under the Gold Reserve Act 1934. With the approval of the President , he can be active in the areas of gold, foreign exchange and other credit and securities instruments.
As of June 2008, the fund held $ 51.2 billion in assets. In February 2009 the fund only held euros and yen worth $ 24.8 billion US dollars. In addition, the fund is said not to have intervened in the currency markets in the course of the financial crisis in the fourth quarter of 2008 .
When in September 2008, in the wake of the bankruptcy of the investment bank Lehman Brothers, investors withdrew large amounts of money from the money market funds, the US Treasury announced that it would protect investors from losses with the aid of US $ 50 billion from the stock exchange stabilization fund. The fund was also used for rescue operations in the 1990s.
Some people believe that the fund will be used to push the gold price down in case of panic.
Web links
- home.treasury.gov/… - Official website of the ESF (English)
Individual evidence
- ^ New York Post : Think of what Washington could do with $ 51B cache (June 12, 2008, last accessed July 23, 2010)
- ↑ Reuters : Fed did not intervene in FX market in Q4 (from February 12, 2009, last accessed on July 23, 2010)
- ↑ Financial Times Deutschland : How Paulson Wants to Catch the Banks ( Memento from August 1, 2012 in the web archive archive.today ) (September 19, 2008, last accessed on July 23, 2010)
- ↑ Commodities Go: The various methods of suppressing gold prices (from March 4, 2009, last accessed on July 23, 2010)