A lot of yield hungry investors have bought into owning high-yield debt, but the high yield comes from the high credit risk faced by these investors.
After the rules go into effect in 2016, it will be possible for investors to lose money in money market funds -– mainly institutional investors.
The newest money market fund rules from the SEC could impose fees on investors and limit redemptions during times of stress.
Sponsors of money market funds say they are safe enough now, but evidence points to the contrary.
The controversy over money market fund reform may be over for the moment as the SEC announced plans to scrap a vote on new proposals.
This week, the SEC chairman went to Congress about the possibility of destabilizing runs on money market funds.
The debate over money market funds has heated up recently as regulators scuffle with the fund industry.
Money market funds are designed to be safe investments that maintain a $1 per share net asset value, or NAV, at all times. Unlike money market accounts offered by banks though, money market funds are not insured by the FDIC. That means it is possible to lose money in a money market fund if the
In the global economy, events on the other side of the world can have big impacts here at home. For instance, the European debt crisis has loomed over domestic money market funds since the beginning. Most people in the United States aren’t directly holding debt securities from the struggling European countries known as the PIIGS,
U.S. prime money market funds reduced investments in European banks by 14 percent between August and September, the Wall Street Journal reported today in the story, “Money Funds Shun European Banks.” That data comes from a report from Fitch Ratings released today. According to the press release from Fitch, European bank holdings make up 37.7