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MIT Golub Center for Finance and Policy

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

By

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

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.