Morethan 10 North American banks and fund managers have collectivelyinjected $3bn into their money market and cash funds since October tostem losses.This week, the fund manager, Janus, became thelatest to bail out its money market funds. It put in $109m to buytroubled asset-backed securities from its funds. Half a dozen firmshave made similar moves.
The bail-outs, in the form ofguarantees, credit lines and the buying out of troubled securities, areintended to stop funds falling below the $1 a share promised toinvestors. They show how seriously the parent companies take thereputational risk of “breaking the buck”.
Not all bail-outs have been made public but more are believed to be being drawn up. The extent of losses is not yet known.
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