Opinion: What to know about how the coronavirus crisis will impact your money market fund

Robert C. Pozen, Senior Lecturer, MIT Sloan School of Management and non-resident Senior Fellow, The Brookings Institution

(Consistent with the GCFP’s mission of non-partisanship and offering analysis but not policy advice, any recommendations contained in GCFP blog posts are those of the authors and do not represent the views of the GCFP.)

Below is a link to a recent MarketWatch article, which addresses the question: Will there be problems today with money market funds as there were in 2009 when a fund “broke the buck?”

My answer is that money market funds should be safe for three reasons. First, Congress just authorized US Treasury to offer account insurance for MM funds.

Second, the Federal Reserve has established a large facility to help finance bank purchases of illiquid securities from MM funds.

Third, the SEC has allowed sponsors and managers of MM funds to purchase illiquid or troubled securities from their own funds.

Read the full article here.