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Approved
Investment Strategy -
Fourth Quarter 2004
Bank Insurance Fund
Current
Strategy as of 4th Quarter 2004*
Maintain a $150 million target floor overnight investment balance.
Strategically invest all available funds in excess of the target overnight
investment balance, which
may include purchasing conventional Treasury securities within the zero- to
ten-year maturity
sector, purchasing Treasury inflation-indexed securities (TIIS) within the
three- to ten-year maturity
sector, and/or purchasing callable Treasury securities with final maturities
not to exceed 12 years,
subject to the following limitations:
- TIIS should not total more than $6.5 billion (adjusted par value) by quarter
end;
- Available-for-sale (AFS) securities should not total more than $9.0 billion
(par) by quarter end; and
- All newly purchased AFS securities should have maturities of six years or less.
Moreover, staff will strive to maintain a $11 billion target floor liquidity
balance.
Strategy
Changes for 1st Quarter 2005
The upper limit on the allowable investment maturities for conventional Treasuries
increased from ten to 12 years; target floor liquidity balance reduced to $10
billion; and, AFS securities limit lowered to $8 billion.
Savings Association Insurance Fund
Current
Strategy as of 4th Quarter 2004*
Maintain a $50 million target floor overnight investment balance.
Strategically invest all available funds in excess of the target overnight investment balance, which
may include purchasing conventional Treasury securities within the zero- to ten-year maturity
sector, purchasing TIIS within the three- to ten-year maturity sector, and/or purchasing callable
Treasury securities with final maturities not to exceed 12 years, subject to the following limitations:
- TIIS should not total more than $2.4 billion (adjusted par value) by quarter
end;
- AFS securities should not total more than $2.5 billion (par) by quarter
end; and
- All newly purchased AFS securities should have maturities of six years or less.
Moreover, staff will strive to maintain a $3.0 billion target floor liquidity
balance.
Strategy
Changes for 1st Quarter 2005
The upper limit on allowable investment maturities for conventional Treasuries
increased from ten to 12 years and AFS securities limit lowered to $2.4 billion.
National Liquidation Fund
Current
Strategy as of 4th Quarter 2004
Maintain a $30 million target floor overnight investment balance.
Strategically invest the remaining funds in the zero- to 12-month maturity sector.
Strategy
Changes for 1st Quarter 2005
None
*The fourth quarter investment strategy was successfully implemented as
highlighted in the the Executive Summary.
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