scholarly journals Part 2 Money Market Funds in the US, 6 Types of Money Market Mutual Funds in the US

2014 ◽  
Author(s):  
Anadu Kenechukwu E
Keyword(s):  
Mutual Funds ◽  
Money Market ◽  
Money Market Funds ◽  
The Us ◽  
Money Market Mutual Funds

scholarly journals The SECs Attempted Use Of Money Market Mutual Fund Shadow Prices To Control Risk Taking By Money Market Mutual Funds

2012 ◽  
Vol 10 (6) ◽  
pp. 345
Author(s):  
Larry G. Locke ◽  
Virginia R. Locke
Keyword(s):  
Mutual Funds ◽  
Risk Taking ◽  
Shadow Price ◽  
Market Value ◽  
Money Market ◽  
Policy Implications ◽  
Share Price ◽  
Shadow Prices ◽  
Money Market Funds ◽  
Money Market Mutual Funds

One of the major advantages of money market mutual funds as a short term cash investment vehicle is that they are always purchased and sold for $1 per share. That constant $1 share price is maintained, despite the obvious fact that the funds holdings are frequently changing value, through a permissive SEC regulation that entitles money funds to value their portfolio securities at amortized cost rather than market value. At the same time, funds have always monitored their true market value in what is referred to as the funds shadow price, disclosed on a semi-annual basis. Starting in December, 2010, the SEC ordered money funds to publish their shadow prices monthly in hopes that investors would take notice and provide market discipline to money funds that failed to keep the funds market value sufficiently close to $1 per share. The expressed intention of the SEC was that investors would restrain money market fund managers from taking undue risks. This study analyzes whether the SECs strategy is working. By assessing the relationship between money market funds shadow prices and subsequent changes in net assets, the authors can look for evidence of whether the market is performing the function the SEC intends. The authors have examined monthly disclosures of shadow prices and asset changes for over 100 money market funds since the funds commenced reporting. Through a series of linear regression analyses, the authors have found no relevant correlation between money funds shadow prices and investor activity. The ramifications of this lack of correlation are potentially significant, particularly now as financial regulators are concerned that money fund holdings of European banks might transmit the current credit deterioration in Greece to U.S. markets. The SEC and other financial regulators are counting on disclosure of shadow prices as a tool to avoid the kind of risk taking that ultimately contributed to the credit market freeze experienced in 2008. If that tool is, in fact, not working, the SEC may be obliged to attempt alternative strategies. The authors discuss the policy implications of their findings.

Deregulation and the demand for money market mutual funds

1989 ◽  
Vol 11 (2) ◽  
pp. 297-308 ◽  
Author(s):  
Chun H. Lam ◽  
Rajat Deb ◽  
Tom Fomby
Keyword(s):  
Mutual Funds ◽  
Money Market ◽  
Demand For Money ◽  
Money Market Mutual Funds

A Study of the Management of Money Market Mutual Funds: 1975-1980

1981 ◽  
Vol 10 (4) ◽  
pp. 24 ◽  
Author(s):  
Michael G. Ferri ◽  
H. Dennis Oberhelman
Keyword(s):  
Mutual Funds ◽  
Money Market ◽  
Money Market Mutual Funds

scholarly journals When Brussels meets shadow banking – Technical complexity, regulatory agency and the reconstruction of the shadow banking chain

2020 ◽  
Vol 24 (3-4) ◽  
pp. 225-247
Author(s):  
Vanessa Endrejat ◽  
Matthias Thiemann
Keyword(s):  
Mutual Funds ◽  
Banking Sector ◽  
Time Pressure ◽  
Banking System ◽  
Money Market ◽  
Shadow Banking ◽  
Money Market Mutual Funds ◽  
High Maturity ◽  
Shadow Banking System ◽  
Bank Balance Sheets

At the heart of the last financial crisis stood the shadow banking system, a mesh of financial activities and entities that grew outside of bank balance sheets but with the support of the banking sector. These activities were not regulated or supervised like banks, and they were characterized by high maturity mismatches and leverage. Two prime elements were Money Market Mutual Funds and Asset-Backed Commercial Papers, which jointly performed bank-like functions. This paper sheds light on the fate of these entities post-crisis and the regulatory dynamics at play as policymakers shifted their focus from constraining their activities to drafting a European regulatory infrastructure that delivers both stability and growth. Based on expert interviews and document analysis, we show how European policymakers opened up to private experts during this shift to learn about the technical complexity of Money Market Mutual Funds and Asset-Backed Commercial Papers, but in the end were restricted in their efforts to craft such regulation due to competing national factions and the legislative time pressure at the European level. We argue that the process was heavily influenced by, first, nationally held visions about the future role of financial markets that came to the fore at pivotal moments during the negotiations, and, second, the specific European institutional set-up and its electoral cycle.

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