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View Full Version : Flows in MoneyMarketFunds LIBOR TED



PeterR
08-10-2016, 12:40 AM
LIBOR rates and TED spread are up by a lot.
Potentially pointing to some systemic risk somewhere. So I thought.

LIBOR
http://stockcharts.com/h-sc/ui?s=%24LIBOR3&p=D&b=5&g=0&id=p99209864400

TED
http://stockcharts.com/h-sc/ui?s=%24TED&p=D&b=5&g=0&id=p08194637261

I feel severely uninformed about this issue.
And I missed any better explanation until tonight.

Today, this article points to changes in regulation for US Money market funds as one major driver:

http://asia.nikkei.com/Markets/Currencies/Interbank-rates-surge-as-dollar-shortage-looms-anew


with upcoming U.S. regulations poised to hit a key source of short-term dollar financing


The surge owes to tighter regulations on American money market funds taking effect in October


Many investors are pulling money out of prime funds, fearing that their cash could get locked in later. Prime funds held $967.1 billion in assets on Aug. 3, down more than 30% from last October's peak.

The questions is now , where will these investors park money short term under the new regime.