Four years after the $62.5 billion Reserve Primary Fund infamously “broke the buck,” i.e. the net value per share of the huge money market fund fell below $1 due primarily to the Lehman bankruptcy, regulators are still mulling ways to avoid the repetition of such events. The collapse of the Primary set off a run on other money funds, and a series of events that helped perpetuate a freeze in global credit markets. Prime money market mutual funds currently hold about $1.41 trillion worth of assets, which are generally low-risk securities against which they are not required to hold any…
SEC Suggests Stress Tests For money Market Funds
HFA Staff
The post above is drafted by the collaboration of the Hedge Fund Alpha Team.