Auction-Rate Bailouts Pose Cost Worries.

The article reports on the financial burden suffered by closed-end fund firms prior to pressures from regulators in the U.S. in 2008. Closed-end fund firms previously helped investors bail out of auction-rate securities (ARS) through redemptions with pricey lines of credit and syndicated bank loans. Regulators are demanding closed-end fund firms to pay investors cash equivalent with higher yields posing cost worries. Wall Street banks decided to buy back ARS which offers relief to closed-end fund firms to surpass the crisis.