Feb
21
The Risk of a Panic in the Bond Mutual Fund Market
ByThere’s a growing risk that credit woes will incite banklike runs on bond mutual funds.
That’s the message from the latest in a series of studies from the Federal Reserve Bank of New York on how market liquidity has changed since the crisis. In two investigations, New York Fed researchers lay out a situation that shows how fire sales caused by problems at some funds could lead to losses that are broader than a decade ago.
Some will blame new regulations that have curtailed the ability of investment banks to act as middlemen. It’s a weak argument, though, and one that the New York Fed tackled in a separate study last October…
The Risk of a Panic in the Bond Mutual Fund Market
