Bears Sent: Wednesday, November 05, 2008 2:55 PM To: Comments Subject: Questions on Temporary Liquidity Guarantee Program
response to questions on the Temporary Liquidity Guarantee Program involving
the programs guarantee on newly issued senior unsecured debt we offer the
overnight federal funds program should be considered exempt
from the 75 basis point premium since this program is used by banks mainly
for settling daily liquidity needs. The fee being charged for overnight
funds as proposed would be costly to community banks that might only have
used the federal funds line for one or two days in a given period.
allowed amount of guaranteed debt should be the total combination of the
holding company and its subsidiaries. This would allow either the holding
company or the bank to issue the unsecured debt with this guarantee as long
as it did not exceed the cap of both entities.
establishing an alternative guarantee cap for the institutions that did not
have any unsecured debt on September 30, 2008, a percentage of total
liabilities, such as 2 % , for both the holding company and its subsidiaries
would allow institutions that have not incurred any unsecured debt for a
considerable period to be able to participate in the program.
Carol A. Bears, AVP
Community Guaranty Savings Bank
28 South Main Street PO Box 996|
Plymouth, NH 03264