Fed Eyes Limiting Money-Market Fund Withdrawals

Please click the link to see the complete article.

When investors decide to close out their riskier positions and move into “cash”, they don’t actually go to the bank and get a stack of twenties. Most just sell their stocks and let their broker sweep the proceeds into a money market fund which, they assume, is the same thing as cash because it holds high-quality short-term commercial paper that almost never defaults.

That pleasant assumption breaks down as soon as you look at a typical money market fund’s holdings and see that it owns, among other disturbing things, a lot of European bank debt.

But at least you can get your money out with a mouse click, right?

Well, maybe not. Apparently the Fed, cognizant of the potential weakness of the money fund system, is considering withdrawal limits:

Fed Eyes Limiting Money-Market Fund Withdrawals

www.nasdaq.com

Please click the link to see the complete article.
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About ace5ace

60, roaming the Ozarks.
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