This paper discusses reasons why money market funds do not pose a systemic risk to the United States banking system, highlighting regulatory differences from banking organizations that make MMFs more liquid, diversified, safe, and efficient than banks. This paper is based on the author's oral...

To some in the MMF industry, the Fed seems on a mission to eradicate MMFs from the financial system. Although the Fed has no direct regulatory jurisdiction over MMFs, the Fed is pushing for major regulatory changes that MMF representatives say would destroy this $2.5 trillion industry. MMFs...

In recent years, U.S. banks have increasingly relied on deposits from financial intermediaries, especially money market funds (MMFs), which collect funds from large institutional investors and lend them to banks. In this paper, we show that intermediation through MMFs allows investors to limit...

Following comprehensive reforms to their regulatory structure in 2010, money market funds were hit in the summer of 2011 by two financial market shocks: the standoff over the U.S. federal debt ceiling and deteriorating conditions in eurozone debt markets. Anticipating that concerns about the...

The instability of money market mutual funds, a relatively new form of financial intermediary that connects short term debt issuers with funders that want daily liquidity, became manifest in the financial crisis of 2007-2009. The bankruptcy of Lehman Brothers, a major issuer of money market...

When the troubles in the subprime markets began surfacing 2007, developments unfolded rapidly in the European MMF industry. The industry suffered from asset price drops and investor redemptions. But the difficulties of the MMF industry also spread to the banking sector and contributed to general...

This paper questions why twelve Federal Reserve Bank presidents have interposed themselves in a rulemaking by the Securities and Exchange Commission concerning money market funds. The Reserve Banks have no jurisdiction over money market funds, no collective expertise in their operations, and no...

On September 16, 2008 following heavy losses on its holdings of Lehman Brothers commercial paper in the wake of the Lehman bankruptcy filing, The Reserve Primary Fund "broke the buck" when its net asset value fell below the $1.00 per share target traditionally maintained by money market mutual...

Money market funds (MMFs) are popular around the world, with over $9 trillion in assets under management globally. From their origins in the 1970s, MMFs have operated in a niche between the capital markets and the banking system, as investment funds that offer private money-like assets with...

Extensive regulatory overhaul in October 2016 changed the money market fund (MMF) industry considerably, especially for institutional clients. Nonetheless, MMFs continue to be an important cash management tool for institutions even though their asset allocations are now much more restricted to...