At least three dozen money-market mutual funds were at risk of failing during the financial crisis, besides one that did end up collapsing, Moody’s Investors Service said Tuesday.
The report shows how shaky the nearly $3 trillion money-fund industry was after Lehman Brothers’ September 2008 collapse.
Around the time that a soured Lehman investment triggered the demise of the $64 billion Reserve Primary Fund, Moody’s says at least 36 other U.S. money funds were also at risk of “breaking the buck” — failing to ensure clients could get back at least a dollar for each dollar they put in.
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Thursday’s announcement by the US administration of a “Financial Crisis Responsibility Fee” has turbo-charged an already heated debate – not just on the merit of an incremental tax on banks, but also on its design and the distortive manner in which it could impact on individual institutions.