Donogue says "[M]oney funds are likely to be safer than uninsured bank deposits"

Dec 24 07

Donogue says "[M]oney funds are likely to be safer than uninsured bank deposits" in MarketWatch column. Bill Donoghue, who probably did more to popularize the money market fund than anyone, says in his latest piece, "Uninsured money funds are likely to be safer than uninsured bank deposits. If decades of money-fund safety during all previous crises -- including the savings and loan crisis and recent bank failures -- haven't convinced your advisers of their value, then you need to consider better informed advisers. Over the past 12 years, uninsured bank accounts have only returned 72 cents on the dollar in the event of a failure, according to the Federal Deposit Insurance Corporation. Insured accounts were of course safe.... SEC regulation and reputational concerns of money-fund managers has proven more effective than FDIC insurance and bank regulation."

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