Today's Wall Street Journal writes "Low Yields Join Credit Worries as Big Issues for Money Funds", which says, "[T]he roughly $4 trillion money-fund industry has stabilized and seen assets return, aided in part by temporary government backing. However, 2009 has brought a host of new issues that are keeping money funds under fire. Record-low interest rates and increased default risk from the credit crunch have left money-fund managers scrambling for creative ways to safely maintain attractive yields. There's soul-searching among fund firms -- especially smaller ones -- about whether they want to stay in the money-fund business.... There's even talk about finding ways for money-market funds to not target net asset value so strictly -- allowing for more flexibility to lessen the fallout from any NAV fluctuations." See also the WSJ's video "Roger Merritt of Fitch Ratings speaks to Diya Gullipalli".
