Reuters writes "​Shrinking money funds may risk systemic ructions", saying, "Any European Central Bank move to cut interest rates below zero could deal a further blow to money market funds already struggling in a low rate environment, raising risks to the wider financial system. Money market funds help grease the wheels of the financial system, providing an important source of short-​term funds for banks and companies and offering investors an alternative to banks as a place to park their cash. But the industry has been shrinking since the financial crisis. Aggregated assets held by euro zone money funds fell to just 929 billion euros at the end of March from 1 trillion euros in 2011, according to the ECB. Not only have they suffered outflows after some funds with risky investments made a loss in 2008-​9, ultra-​low interest rates mean they are struggling to give decent returns. If rates go negative, the industry'​s contraction is likely to accelerate."

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