When First Republic became the latest victim in the US banking system, whose safety was only assured by a fire sale to JP Morgan, there was an eerie echo with other financial crises this year.
Concerns about asset quality led to a run on deposits, leading to solvency concerns. As with Silicon Valley Bank, Signature Bank and Credit Suisse, the big winners of the struggling banks’ cash flight were the same: the money market funds.
An MMF is a type of mutual fund that typically holds high-quality, low-risk assets that are easy to buy and sell, such as short-term US government debt. However, it differs from other funds in that it is essentially a short-term cash management tool.
MMFs therefore tend to bid
