money-market fund

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money-market fund,

type of mutual fundmutual fund,
in finance, investment company or trust that has a very fluid capital stock. It is unique in that at any time it can sell or redeem any of its outstanding shares at net asset value (i.e.
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 that invests in high-yielding, short-term money-market instruments, such as U.S. government securities, commercial papercommercial paper,
type of short-term negotiable instrument, usually an unsecured promissory note, that calls for the payment of money at a specified date. Because it is not backed by collateral, commercial paper is usually issued by major firms whose credit-rating is so good
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, and certificates of deposit. Returns of money-market funds usually parallel the movement of short-term interest rates. Some funds buy only U.S. government securities, such as Treasury bills, while general-purpose funds invest in various types of short-term paper. They became enormously popular with investors in the early 1980s because of their high yields, relative safety, and high liquidity. Investment in money-market funds soared from $20 billion in the late 1970s to over $150 billion in the early 1980s. Much of the growth came at the expense of banks and thrift institutions. With the recession of the late 1980s and early 1990s, interest rates (and, temporarily, the popularity of the funds) dropped. By 2008, some $3.5 trillion was invested in U.S. money-market funds when concerns about real and potential investment losses as a result of the global financial crisis led to sizable withdrawals from the funds; as a result, the Treasury dept. temporarily guaranteed the funds against losses.
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The combination of money fund reforms and the liquidity coverage ratio is resulting in a cash crunch for corporate liquidity accounts.
According to Fitch Ratings, while bringing a fundamental change in cash management for corporate treasurers, money market fund reform will have its major impact on institutional prime and municipal money funds.
This dynamic may be partially explained by the Fed's eligibility criteria, which require that a money fund have net assets of at least $5 billion for six months before being able to participate in the Fed's reverse repo facility.
Chamber of Commerce on Monday, verbally charged a panel of top financial regulators who have tried to pressure the agency to enact new reforms for asset managers and money funds.
In fact, if the money invested in such money fund, this means that they will be distributed in several banks and mostly up to 20 percent of the funds will be invested in one bank with which the security is increased.
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BANKING AND CREDIT NEWS-December 7, 2012--US money funds up Eurozone bank exposure, according to Fitch(C)2012 M2 COMMUNICATIONS http://www.
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This council, chaired by Treasury Secretary Tim Geithner, can choose to designate the money fund industry or individual funds as "systemically important" and recommend that the SEC act or bring them under the oversight of the Fed.
New York-based boutique investment firm CastleOak Securities, LP has said that it has recently launched Money Fund Access, a leading edge institutional money fund portal.
Crane, managing editor of IBC's Money Fund Report, which is published in Ashland, Massachusetts.
Specifically, money fund characteristics, share pricing, and regulations are discussed.