Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154205
Authors: 
Parlatore, Cecilia
Year of Publication: 
2015
Series/Report no.: 
ECB Working Paper 1772
Abstract: 
I develop a model of money market funds (MMFs) to study the ability of sponsor support to provide stability to the industry. I find that strategic complementarities in the sponsors’ support decisions can make MMFs vulnerable to runs different from the canonical bank-runs: it may lead to runs of intermediaries on each other through firesales in the money market. I then use the model to analyze the effects of imposing a floating net asset value and capital requirements on MMFs. I find that general equilibrium effects, which are mostly ignored in the policy discussion, can overturn conventional intuition.
Subjects: 
fire sales
money market funds
regulation
runs
support
JEL: 
G01
G21
G28
ISBN: 
978-92-899-1585-4
Document Type: 
Working Paper

Files in This Item:
File
Size
696.23 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.