Wednesday, September 23, 2009
Lehman Brothers, a year later
By Jason T. White, Ph.D.
Friday, September 18 the Treasury Department's temporary program to guarantee money market funds ended. The good news is that this was essentially a "non-event" on Wall Street and with investors around the country.
You might recall that the temporary government guarantee program was put in place following investor flight from money market funds in the wake of the Reserve Primary Fund's "breaking of the buck," meaning that the fund's net asset value fell below $1 per share. The collapse of Lehman Brothers was the primary impetus for the failure of this fund, and investors were understandably fearful that this event might spread to other money market funds. It didn't.
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