The Widow Who Invented the Money Market Fund
In 1970s America, a bookkeeper named Bruce Bent and his partner built the first money market fund to let ordinary savers earn bank-level returns. Decades later, that same invention 'broke the buck' in a 2008 panic that froze the plumbing of the global financial system. This is the story of a product designed for safety that became a hidden fault line.
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Regulation Q capped bank interest rates, preventing small savers from accessing high-yield institutional debt markets.
The Reserve Fund bypassed federal interest caps by pooling small deposits to buy large-scale Treasury bills.
Money market funds maintain a stable one-dollar share price to simulate the safety of cash accounts.
The Lehman Brothers bankruptcy caused the Reserve Primary Fund to break the buck at ninety-seven cents.
Investors withdrew over three hundred billion dollars from prime funds during the two thousand eight credit seizure.
The United States Treasury provided a temporary guarantee program to stabilize the two point seven trillion dollar industry.
- 01Intro1 min
- 02The Great Interest Rate Escape2 min
- 03The Hundred Million Dollar Article2 min
- 04Breaking the Buck3 min
- 05The Emergency Backstop2 min
- 06Outro1 min
- Bruce R. Bent - Wikipedia
- A Brief History of Money Market Funds - Nelson Capital Management
- [PDF] United States: Reserve Primary Fund Suspension, 2008 - EliScholar
- [PDF] MONEY MARKET FUNDS IN 2012 History of Money Market Funds
- The story of the first Money Market Fund
- A Brief History of Money Market Investments | ADM
- Reserve Primary Fund - Wikipedia
- Money Market Mayhem: The Reserve Fund Meltdown
- March 28, 2014
- Broken bucks: money funds that took taxpayer guarantees in ...
- United States: Reserve Primary Fund Suspension, 2008
- A Look Back at Sept. 16, 2008. Reserve Primary Fund Breaks the Buck
- Reserve Primary Fund Distributes Assets to Investors; 2010-16
- Twenty-Eight Money Market Funds That Could Have Broken the Buck
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