Page 609 - Bedford-FY25-26 Budget
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Return to Financial Policies
markets in decades. FHFA stated that there are no LETTERS OF CREDIT: A financial instrument in
plans to liquidate the company. which the issuing bank promises to pay a third party
on behalf of a second party.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (FNMA or Fannie Mae): A U.S. LIQUIDITY: (a) The ability to convert an asset
government-sponsored private corporation whose easily and rapidly into cash without a substantial
chief function is to supply funds for home loss of value. (b) The availability of cash and liquid
mortgages through continuous purchases of assets to the City.
mortgages from lending institutions. On September
7, 2008, the Federal Housing Finance Agency LOCAL GOVERNMENT INVESTMENT POOL
(FHFA), announced that Fannie Mae and Freddie (LGIP): An entity created under the regulations and
Mac were being placed into conservatorship of the codes of the State of Texas to invest public funds
FHFA. The action was "one of the most sweeping jointly on behalf of the entities that participate in the
government interventions in private financial pool.
markets in decades". FHFA also dismissed the
firms' chief executive officers and boards of MARKET VALUE: The price at which a security
directors, and caused the issuance to the Treasury is trading and could presumably be purchased or
new senior preferred stock and common stock sold.
warrants amounting to 79.9% of each GSE. FHFA
stated that there are no plans to liquidate the MATURITY: The date upon which the principal or
company. stated value of an investment becomes due and
payable.
FEDERAL OPEN MARKET COMMITTEE
(FOMC): Consists of seven members of the Federal MONEY MARKET: The market in which short-
Reserve Board and five of the twelve Federal term debt instruments (bills, commercial paper,
Reserve Bank Presidents. The President of the New bankers' acceptances, etc.) are issued and traded.
York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a OFFER: The price asked by a seller of securities.
rotating basis. The Committee periodically meets to
set Federal Reserve guidelines regarding purchases OPEN MARKET OPERATIONS: Purchases and
and sales of Government Securities in the open sales of government and certain other securities in
market as a means of influencing the volume of the open market by the New York Federal Reserve
bank credit and money. Bank as directed by the FOMC in order to influence
the volume of money and credit in the economy.
FEDERAL RESERVE SYSTEM: The central bank Purchases inject reserves into the bank system and
and monetary authority of the United States. stimulate growth of money and credit; sales have
the opposite effect. Open market operations are the
GOVERNMENT NATIONAL MORTGAGE Federal Reserve's most important and most flexible
ASSOCIATION (GNMA or Ginnie Mae): GNMA monetary policy tool.
is a federal government corporation that guarantees
the timely payments of principal and interest on NATIONAL CREDIT UNION SHARE
mortgage-backed securities (MBS) issued by INSURANCE FUND: The federal fund to insure
approved lenders. GNMA connects the US housing member's deposits in federally insured credit
market to capital markets, providing low- cost unions. Administered by the National Credit Union
financing for federal housing programs through the Administration, the Share Insurance Fund has the
Federal Housing Administration (FHA), Veterans backing of the full faith and credit of the United
Affairs (VA), HUD’s Public and Indian Housing States. Government.
(PIH), and the Department of Agriculture (USDA)
PORTFOLIO: Collection of investments held by an
City of Bedford, TX | Adopted Budget FY 2025-2026 Page 609
