MMFs lower risky investments in low-rate environment – paper
After a 1% rate cut, money market funds decrease risky investments by 25 percentage points
A lower risk-free rate encourages money market funds to increase their buffer of safe assets, says research published by the Federal Reserve Bank of New York.
In the ‘Do low rates encourage yield seeking by money market funds?’ blog post, Gabriele La Spada discusses his research seeking to understand how money market funds’ investment strategies evolve in a low-rate environment.
Specifically, La Spada’s aim is to find “whether competitive pressure leads these funds to reach for yield in a low
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com
More on Investment
Canada proposes ban on foreign investors buying houses
Hot housing market is adding to domestic inflation’s record highs
IMF officials warn of high-risk asset sell-off
Investment in emerging markets could be hit by over-aggressive tightening, economists say
Evolving investment activities with ETFs
BlackRock‘s Crystal Wan, Andrew Mackenzie and Pablo Arteaga examine the exchange-traded funds market from the perspective of central banks seeking the tools to achieving their financial goals
Hong Kong’s Exchange Fund reports record loss in first quarter
State fund’s assets lose $11 billion and investment chief warns of further losses
ECB paper sets out stress tests for investment funds
Depletion in assets under management could reach 24% for equity funds and 5% for bond funds
China tightens scrutiny of outbound investments
Regulators are looking to restrict and control outbound investments
Capital deepening ‘virtually absent’ in US and eurozone – ECB
US and eurozone have seen major falls in net investment, ECB article says
Emerging market fundamentals mean investment still makes sense, says Sarb deputy
South African Reserve Bank deputy governor Daniel Mminele tells investor conference that recent volatility is testimony EMs increased responsiveness to changes in underlying fundamentals