Treasurer
Josh Mandel
Impending TAG expiration requires
new investment options
COLUMBUS
- Ohio Treasurer Josh Mandel sent notice to local
government finance officers today that the Federal Deposit Insurance
Corporation's (FDIC) Transaction Account Guarantee (TAG) Program is
currently
set to expire on December 31, 2012. The TAG program was created in 2008
in
response to the global financial crisis, and provides an uncapped
federal
guarantee on funds held at FDIC-insured depository institutions in
noninterest-bearing transaction accounts. Treasurer Mandel also
detailed
investment options offered by the Ohio Treasurer's office that can help
local
governments maintain security and full FDIC insurance, while earning
competitive
yield. In his notice to local public funds managers, Treasurer Mandel
stated:
"While
it is possible that the TAG program could be extended
before it expires, I would encourage all Ohio government entities to
ensure the
safety of public funds under their management. If the TAG program does
expire
on December 31, public deposits held in TAG accounts in excess of the
$250,000
FDIC insurance limit must generally be collateralized or moved into a
safe
investment alternative."
The
Ohio Treasurer's office makes TAG alternatives available to
local government entities through the State Treasury Asset Reserve of
Ohio
(STAR Ohio) and STAR Plus programs. These secure investment options
offer a
number of benefits to all Ohio local government subdivisions, including
those
currently utilizing the TAG program:
STAR
Ohio: The STAR Ohio program is a local government investment
pool managed by the Ohio Treasurer's office that has maintained
Standard &
Poor's highest rating possible (AAAm), can accept deposits of any size,
offers
daily liquidity, and provides a competitive yield (9 basis points as of
December 19, 2012).
STAR
Plus: The STAR Plus program is a bank deposit program
endorsed by the Ohio Treasurer's office that offers full FDIC insurance
on
local government deposits from $500,000 to $15 million, provides weekly
liquidity, and returns a competitive yield (25 basis points as of
November
2012).
"I
am proud to make these programs available to Ohio local
government entities, and would encourage public funds managers to
consider
taking advantage of them," continued Treasurer Mandel. "STAR Ohio and
STAR Plus are strong investment alternatives to TAG designed to help
ensure
that Ohio taxpayer dollars are fully secured, while earning a
competitive yield
for local schools, cities, counties, and political subdivisions."
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