This causes weird things to happen in credit markets: a store where the products cost nothing, or almost nothing, is unlikely to function like a normal store. This is most visible in money market funds, the vast cash-like investment pools that investors treat as a higher-yielding alternative to bank deposits. To recap recent events: as the seriousness of Covid-19 became clear, there was a rush out of “prime” money market funds, which invest in corporate debt, to the safety of government funds — which were already receiving heavy inflows as investors got out of still riskier assets.
— Read on finance.yahoo.com/m/822acb4b-c5df-36a7-bc5d-cff319933193/there-are-risks-to-liquidity.html
Skip to content