During the financial crisis, at least 78 money funds received support from their sponsors, and for at least 21 of those funds, that support allowed them to avoid "breaking the buck," according to a Boston Fed study, Reuters reports. The Boston Fed examined the filings of 341 prime money funds for the years 2007 to 2011 and identified at least 78 funds that received support, with such support totaling $4.4 billion. For at least 21 of the funds, the support represented more than 0.5% of their assets, suggesting that without it, their net asset value would have fallen below $1 a share.

The Securities and Exchange Commission has proposed regulatory changes to reduce the possibility that money funds require such support, but the fund industry is resisting the changes.


Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.