Goldman Sachs and BNY Mellon have bailed out several of their money market funds, a vital cog in short-term financing for large corporations and a source of liquidity for investors. The Fed has launched a support program for the sector.

The Federal Reserve acted as early as the middle of last week to ensure the proper functioning of monetary funds.

Money market funds, usually one of the most stable segments of the financial sector, are not immune to the pressures affecting the bond markets. These so-called “prime” corporate debt funds recorded outflows of more than $ 85 billion during the week to March 18, putting pressure on their ability to honor withdrawal requests by investors. investors. To cope, Goldman Sachs had to buy more than $ 1 billion in assets from two of its “prime” money market funds, while BNY Mellon has taken over the securities of one of its funds, Dreyfus Cash Management, for more than two billion dollars. Goldman’s funds had suffered more than 8 billion withdrawals in the previous days.

Ensure liquidity