"Downgrades Could Limit Investment Pool for Money-Market Funds" writes WSJ.com. The article, written by Anusha Shrivastava, says, "The ongoing review of more than a hundred banks by Moody's Investors Service is shrinking the pool of debt U.S. money-market funds can purchase. By mid-May, the ratings firm could downgrade 114 European banks and nearly half a dozen U.S. banks, including Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase and Morgan Stanley. Such downgrades would mean conservative money-market funds, which only buy the highest-rated debt, would not be able buy commercial paper from these banks. Already, some investors have reduced the length of time they lend to issuers whose ratings are on watch for downgrades and "some have allowed maturing paper to roll off," said Stewart Cutler, director and head of money market origination at Barclays. This leaves the buyers searching for other places to park their cash, generally U.S. government debt and non-financial commercial paper."
