The $400 Billion Money-Fund Exodus With Banks in Its Crosshairs
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A view of Royal Bank in Toronto, Canada.
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Push to make money markets safer transforms industry
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Investors set to exit prime funds, which buy commercial paper
Banks and other companies that have seen borrowing costs rise in the past year are about to feel more pressure in a $1 trillion market for short-term IOUs.
Investors are poised to pull as much as $400 billion from U.S. money-market funds that buy such debt, known as commercial paper, JPMorgan Chase & Co. predicts. The looming exodus, a consequence of steps to make money markets safer after the financial crisis, is set to accelerate before October. That’s when Securities and Exchange Commission rules take effect mandating that so-called institutional prime funds, among the main buyers of commercial paper, report prices that fluctuate. Traditionally, those funds have stuck to $1 per share…
The $400 Billion Money-Fund Exodus With Banks in Its Crosshairs
