Bank of America announced Tuesday, November 13, 2007 that it planned to set aside $600 million to cover potential losses in tis money market funds and an institutional cash management fund. This is the largest step by a financial institution to ensure that its money funds aren't forced to reduce the value of their shares. Click here for the full article.
"Money funds have long appealed to people as super-safe investments. And they've kept their share prices fixed at $1 a share. But unlike banks' money market deposit accounts, money funds are not federally insured. The crisis in subprime mortgages has jolted the market for the short-term securities that money funds invest in. Even so, assets in money funds recently hit a record $3 trillion.
...
Several other financial institutions have also bolstered their money funds:
- SEI, an insitutional money manager in Oaks, Pa., has set aside $129 million to support two of its money funds.
- Legg Mason, a Baltimore money management firm, has set up a $238 million line of credit for two money funds. It also invested $100 million to buoy an offshore money fund.
- SunTrust (STI) has received SEC permission to set up credit lines for two money funds.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment