WASHINGTON (Reuters) - The U.S. Treasury’s new money market guarantee program is aimed at maintaining investor confidence in money market mutual funds, but will be temporary and not be transferred to the Federal Deposit Insurance Corp, a U.S. Treasury official said on Friday.

“What we didn’t want was a significant percentage of Americans who have these money market funds to lose confidence in the safety and security of these funds and begin to seek redemptions,” the official told a conference call.

Since such confidence is critical to market stability, the program is designed to ensure that around $2 trillion in money market funds registered with the Securities and Exchange Commission known as 2A7 funds maintain a net asset value of at least $1 per share, using around $50 billion in assets from the Exchange Stabilization Fund. Funds also will pay fees to the Treasury for providing the guarantee.

The ratio of money market assets to Exchange Stabilization Fund assets is similar to that of insured bank deposits to the FDIC’s $52 billion insurance fund, the official said.

The fund is “similar in design but not a mirror image” to the FDIC deposit insurance, and is designed to promote the same kind of confidence. Unlike the FDIC fund, which is limited to $100,000 per deposit account, there are no limits for individual money market investments.

The official said participation in the guarantee program would not be mandatory for all money market funds, but he expected strong participation among 2A7 funds.