Daily Links Archives: August, 2011

The latest "Minutes of the Federal Open Market Committee" (Aug. 9) mention money market mutual funds at several points. The minutes say, "Over the intermeeting period, U.S. financial markets were strongly influenced by developments regarding the fiscal situations in the United States and in Europe and by generally weaker-than-expected readings on economic activity. Throughout the period, waxing and waning concerns about the sovereign debt of peripheral euro-area countries appeared to have an effect on investor appetite for risk, leading to volatility in many asset markets. Late in the period, investor focus appeared to turn to the U.S. debt ceiling and the potential for delayed debt service payments by the Treasury Department, the possibility of a downgrade of U.S. sovereign debt, and the prospects for significant long-term fiscal consolidation. Liquidity and funding in money markets deteriorated in the last week of July, and interest rates on a number of short-term funding instruments increased markedly. The strains in these markets eased after legislation to raise the debt ceiling and to cut the federal budget deficit was signed into law on August 2.... The market for CP issued by financial firms experienced some strains late in the period as institutional money market mutual funds reportedly increased their cash positions and sought to decrease exposure to CP issued by some entities perceived to be less creditworthy.... M2 expanded rapidly in June and July. Liquid deposits, the largest component of M2, increased robustly, likely reflecting safe-haven flows from riskier assets along with temporary increases in the amount of deposits that money market mutual funds held at their custodian banks."

Bloomberg wrote last week "BofA, Citigroup Are Accused by Schwab in Suit of Manipulating Libor Rates". The article said, "Charles Schwab Corp., the largest independent brokerage by client assets, sued Bank of America Corp., Citigroup Inc. and other banks claiming they manipulated the London interbank offered rate, or Libor, starting in 2007 in violation of U.S. antitrust law. The banks conspired to depress Libor rates by understating their borrowing costs, thereby lowering their interest expenses on products tied to the rates, according to the lawsuit filed Aug. 23 in federal court in San Francisco, where Schwab is based." Bloomberg added, "The case is Schwab Money Market Fund v. Bank of America Corp., 11-cv-4186, U.S. District Court, Northern District of California (San Francisco)."

Crane's 2nd Annual Money Fund University, which will be held on January 19-20 at the Hyatt Regency Boston, is preparing to publish its preliminary agenda. We're still looking for speakers, though. Any interested and qualifed parties should e-mail Pete for more details. This year's event will have a stronger focus on regulatory and Rule 2a-7 content. Also, we're soliciting proposals for next year's Crane's Money Fund Symposium, which will be in Pittsburgh June 20-22 (note a slight date change from earlier notices). See www.moneyfunduniversity.com and www.moneyfundsymposium.com for more details and for future updates.

Deutsche Bundesbank Member Andreas Dombret spoke Wednesday on "Current developments in Germany and Europe." He said, "When I mention counterparties, please allow me to briefly address one current point of interest in financial markets on both sides of the Atlantic: US dollar funding of European banks. This is certainly an area that relevant authorities, including the Bundesbank, monitor closely. But let me offer you some assurance about the current situation -- in particular, of course, from the German point of view. Without a doubt unsecured US dollar funding markets have tightened somewhat recently. For example, US money market funds, which account for a non-negligible but small part of European banks' short-term liabilities, have become more selective when providing funding to non-domestic banks. But let me emphasize that we are very far away from the situation we witnessed in 2008. First, liquidity needs can be covered by a number of other means including secured funding with repos. Second, if need be, the ECB stands ready to mitigate potential bottlenecks, based on the swap agreement in place with the Fed. Third, the lion share of German and other European banks have used the rather benign market conditions in the first part of this year and have completed an over-proportional part -- or even all -- of their overall 2011 funding needs in the capital market segment. And let me make a final important point here: European banks, in general, have considerably improved their capital base making them less vulnerable to financial strains. Speaking about German banks, the Tier 1 capital ratio currently reaches 12.6% on average, having improved by about three percentage points between the end of 2008 and June 2011." See also, ICI's weekly "Money Market Mutual Fund Assets."

Fitch writes "Local Gov't Pools' Ratings Weather Volatile Environment". The release says, "Ratings assigned to local government investment pools (LGIPs) and other public funds by Fitch Ratings remain unchanged, despite the recent period of heightened market volatility. Fitch is issuing this sector comment in response to questions from various LGIP participants. Fitch-rated LGIPs and public funds invest in high quality securities and, on average, allocate over 72.4% of their assets to U.S. government and agency securities. Liquidity parameters remained consistent with the policies governing redemption activities of these fund's participants.... As of June 30, 2011, Fitch rated 11 LGIPs and other funds managed exclusively for the benefits of public entities. Combined assets under management of these funds were approximately $16.6 billion." Rated LGIPs include: City of Oakland Operating Fund - 'AAA/V1'; Community Redevelopment Agency of Los Angeles (CRA/LA), Investment Portfolio - 'AAA/V1'; Marin County Investment Pool - 'AAA/V1'; Riverside County Treasurer's Pooled Investment Fund - 'AAA/V1'; San Bernardino County Investment Pool - 'AAA/V1'; San Luis Obispo County Treasury Investment Pool - 'AAA/V1'; City of Colorado Springs, Colorado Investment Portfolio - 'AAA/V1'; Colorado Local Government Liquid Asset Trust (COLOTRUST Plus+) - 'AAA/V1'; Florida Municipal Investment Trust 1-3 Year High Quality Bond Fund - 'AAA/V2'; Florida Municipal Investment Trust Broad Market High Quality Bond Fund - 'AA/V4'; Florida Municipal Investment Trust Intermediate High Quality Bond Fund - 'AAA/V3'."

Dow Jones writes "Europe Banks Can Cope With US Money Market Fund Pullback-Fitch". It says, "European banks in France, Germany, the U.K. and northern Europe have little to worry about from an ongoing pullback in funding from U.S. money market funds, analysts at Fitch Ratings said Tuesday, as investors continued to be concerned about the availability of bank funding in volatile markets. Fitch European banks analyst Bridget Gandy told a conference call that even a total withdrawal of U.S. money market funds would only be "inconvenient," since the reliance on these kinds of funds is relatively small for most large European banks. She said the banks themselves have been choosing to find funding elsewhere in the past few months, particularly as the opportunity to raise cheap dollar-denominated money market funds and use it to earn interest on deposit with the U.S. Federal Reserve has receded. Fitch on Monday published a report highlighting how U.S. money market funds have cut their exposure to Italian and Spanish banks to virtually zero, while also sharply reducing their holdings in French and German bank debt since May. Debt maturities are also shortening, as U.S. money market funds become less willing to take any Europe-related risk and aim to have more liquid assets on hand to meet redemption requests by their own investors." In other news, Bloomberg writes the oddly titled, "Fed Made State Street Profitable as Middleman".

Pensions and Investments writes "Money market funds hold firm; more hurdles loom". The article says, "The U.S. debt ceiling crisis, S&P's unprecedented downgrade of America's AAA credit rating and eurozone debt woes have delivered a triple-whammy to money market strategies, but this time, the sector is proving resilient." P&I quotes Martyn Simpson of Mercer LLC, "For money market strategies, it's the biggest test since Lehman Brothers. So far, they're holding up well." The piece adds, "The low interest-rate environment already has made it very challenging for fund managers to operate profitably. In addition, the continuing regulatory debate over the structure of the money market sector is causing a lot of uncertainty. On top of that, there are far fewer investment options, particularly as recent market volatility has forced cash fund managers to shorten the duration of portfolios, which already are under more restrictive investment guidelines."

BlackRock recently posted a link to video of Barbara Novick's speech from Crane's Money Fund Symposium on "Public Policy, Washington & Money Funds". BlackRock says, "In late June this year around 400 money market industry professionals gathered together at Crane's Money Fund Symposium in Philadelphia. Money market portfolio managers, investors, issuers and service providers met together over three days to attend presentations from key industry figures and debate topical industry issues. Barbara Novick, Vice Chairman, co-founder and head of Government Relations for BlackRock, Inc. presented "Public Policy, Washington & Money Funds" to attendees and reviewed the various options currently under consideration with the SEC and other regulators aimed to strengthen the money market funds industry. Options include moving the industry to a floating NAV, requiring capital and/or NAV buffers for money market funds or redemption fees. This short video is an extract from Ms. Novick's presentation held on June 22, 2011."

The Wall Street Journal writes "Low Rates Hit Money-Market Funds". It says, "Money-market mutual funds, those havens of safety for investors during tumultuous times, are facing their own pressures as interest rates continue to decline. The funds, which historically aimed to provide higher yields than bank deposits without risk of losses, are waiving fees and consolidating -- or closing their doors altogether. The drop Thursday on the 10-year Treasury to below 2% in intraday trading provided fresh bad news for the funds. Money-market funds once were profit machines, collecting $13 billion in fees at their peak in 2008. But they have seen their revenues shrivel by 65% over the past three years as short-term interest rates have fallen to near zero. The Federal Reserve's announcement last week that it would likely leave rates untouched for the next two years erased hopes for improvement anytime soon, say analysts. Despite the continued interest-rate pressures, money-market funds have seen a surge of inflows recently as investors increasingly seek the safety of cash amid the market turmoil. Some $60 billion has gone into money funds this month, according to money-fund tracker Crane Data LLC. Also, a recent announcement by Bank of New York Mellon Corp. that it might start charging customers with $50 million or more in their accounts to hold their cash could force others into money funds. Still, any big inflows into money funds could be temporary, depending on the length of the market chaos, and with interest rates remaining low, would offer little relief for the industry, analysts say." See also, ICI's weekly "Money Market Mutual Fund Assets", which says, "Total money market mutual fund assets increased by $10.21 billion to $2.631 trillion for the week ended Wednesday, August 17, the Investment Company Institute reported today."

We learned from Mutual Fund Wire that American Beacon is closing its Mileage money market share class. The SEC Filing says, "On August 10, 2011, the Board of Trustees of American Beacon Mileage Funds approved a plan to liquidate and terminate the American Beacon Money Market Mileage Fund, upon recommendation by American Beacon Advisors, Inc., the manager to the Fund. Due to the size of the Fund [$24 million], the Manager does not believe that it can continue to conduct the Fund's business and operations in an economically efficient manner. As such, the Board concluded that it would be in the best interests of the Fund and its shareholders to liquidate and terminate the Fund." American Beacon continues to run the American Beacon MM Select and American Beacon US Govt Select money funds. The filing adds, "In anticipation of the liquidation, effective immediately the Fund is closed to new shareholders. Effective August 22, 2011, the Fund will stop accepting purchases into the Fund from existing shareholders. To prepare for the closing and liquidation of the Fund, the Fund's portfolio managers may need to increase the portion of the Fund's assets held in cash and similar instruments in order to pay for Fund expenses and meet redemption requests. As a result, the Fund may deviate from its stated investment objective. On or about September 30, 2011, the Fund will distribute cash pro rata to all remaining shareholders who have not previously redeemed all of their shares."

Dow Jones writes "Money Market Funds Struggle As Fed Keeps Rates Near Zero", The article says, "Money market funds, their pre-recession glory days well behind them, have a new cloud over their future: how to stay in business another two years when their investors know there's no hope for profits. The funds lost any chance of making money before 2013 when the Federal Reserve said last week it would keep interest rates -- which fuel returns on the low-risk assets the funds must purchase -- near zero for at least another two years. Many small funds have already exhausted emergency measures like waiving management fees just to survive since the Fed all-but eliminated interest rates in 2009. Those funds that are out of options will likely fold, though larger funds should still be able to draw investors looking to hold nearly risk-free assets, analysts tracking the money market sector say. The number of money funds in operation has already dropped to 652 at the end of 2010 from 805 at the end of 2007, according to data from the Investment Company Institute, a national association of U.S. investment companies." The article [mis]quotes Peter Crane, president of Crane Data, a research firm that tracks money market funds, "It was [may be] the last straw for smaller players." The piece adds, "The one card the funds have left is that they're safe. Even funds that won't return a penny until at least 2013 can all-but guarantee that investors won't lose anything more than management fees. That's enough to lure investors worried about the risk posed by the stock market or currencies, which have proven volatile this year amid an uncertain economic outlook."

The Federal Reserve Bank of New York published a research piece, entitled, "Mapping Change in the Federal Funds Market". It says, "We use an information-theoretic approach to describe changes in lending relationships between federal funds market participants around the time of the Lehman Brothers failure. Unlike previous work that conducts maximum-likelihood estimation on undirected networks, our analysis distinguishes between borrowers and lenders and looks for broader lending relationships (multibank lending cycles) that extend beyond the immediate counterparties. We find that significant changes in lending patterns emerge following implementation of the Interest on Reserves policy by the Federal Reserve on October 9, 2008." (Click for the full study.)

The Federal Reserve Bank of New York issued a "Statement Regarding Reverse Repurchase Agreements" Friday, which says, "As noted in the October 19, 2009, Statement Regarding Reverse Repurchase Agreements, the Federal Reserve Bank of New York has been working internally and with market participants on operational aspects of triparty reverse repurchase agreements to ensure that this tool will be ready if the Federal Open Market Committee decides it should be used. Beginning Monday, August 15, the New York Fed intends to conduct another series of small-scale reverse repurchase (repo) transactions using all eligible collateral types. The first operation will be conducted using only the expanded reverse repo counterparties announced on July 27, 2011. Subsequent operations in this series will be open to all eligible reverse repo counterparties. Going forward, the Federal Reserve plans to conduct a series of small-scale reverse repurchase transactions about every two months, which will bring the frequency of these operational exercises in line with that of the Term Deposit Facility exercises. Like the earlier operational readiness exercises, this work is a matter of prudent advance planning by the Federal Reserve. The operations have been designed to have no material impact on the availability of reserves or on market rates. Specifically, the aggregate amount of outstanding reverse repo transactions will be very small relative to the level of excess reserves, and the transactions will be conducted at current market rates. These operations do not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future. The results of these operations will be posted on the public website of the Federal Reserve Bank of New York, together with the results for other temporary open market operations. The outstanding amounts of reverse repos are reported as a factor absorbing reserves in Table 1 in the Federal Reserve's H.4.1 statistical release and as liability items in Tables 8 and 9 of that release."

ICI's weekly "Money Market Mutual Fund Assets" says, "Total money market mutual fund assets increased by $52.78 billion to $2.621 trillion for the week ended Wednesday, August 10, the Investment Company Institute reported today." Taxable government funds increased by $38.29 billion, taxable non-government funds increased by $18.19 billion, and tax-exempt funds decreased by $3.71 billion. Assets of retail money market funds increased by $11.74 billion to $942.58 billion. Taxable government money market fund assets in the retail category increased by $6.30 billion to $186.38 billion, taxable non-government money market fund assets increased by $6.90 billion to $559.42 billion, and tax-exempt fund assets decreased by $1.46 billion to $196.78 billion.... Assets of institutional money market funds increased by $41.04 billion to $1.678 trillion. Among institutional funds, taxable government money market fund assets increased by $31.99 billion to $622.90 billion, taxable non-government money market fund assets increased by $11.30 billion to $952.79 billion, and tax-exempt fund assets decreased by $2.25 billion to $102.79 billion." This surge, which recovers much of the outflows associated with the debt ceiling debate, represents the 8th largest weekly increase ever, according to Crane Data's tracking of ICI's data, and the largest weekly increase since Oct. 8, 2008.

The Wall Street Journal writes "Crisis Lessons Learned, Commercial-Paper Market Skates Through Tumult". It says, "The market for short-term borrowers and lenders is just about the only place investors haven't lost their cool this week -- a big step up from 2008, when the commercial-paper market famously required a Federal Reserve facility to avoid freezing entirely. What has kept this $1 trillion market from suffering the same volatile trading that has sent share prices and currencies bouncing around is a year-old regulation forcing money-market funds to hold more short-term debt. The rule, implemented by the Securities and Exchange Commission starting in May 2010, has helped convince investors and issuers that money will keep flowing through the commercial-paper market, even during a crisis." The Journal quotes Rob Little, head of global short term fixed income origination at Bank of America Merrill Lynch, "The market is in much better shape that it could withstand a real shock ... because the system is so much better prepared. The government would not have to step in."

The Wall Street Journal writes "Call to Downsize Giants of Ratings". It says, "McGraw-Hill Cos.' S&P unit, Moody's Corp.'s Moody's Investors Service unit and Fitch Ratings, a unit of French company Fimalac SA, have about 2.7 million ratings on corporate, municipal, sovereign and other types of debt, according to securities filings. The seven other ratings firms overseen by the Securities and Exchange Commission have around 82,000 ratings. The three biggest credit-ratings firms have "been given a monopoly," Mohamed El-Erian, chief executive and co-chief investment officer of Pacific Investment Management Co., said in an interview last week, before S&P's downgrade. "Whether we like it or not, the rating agencies are hard-wired into the system." Criticism of the industry's dominance heightened following S&P's downgrade, especially after the company went ahead with the downgrade after U.S. officials said they noticed a $2 trillion error in S&P's calculations. The mess is fueling an unusual consensus among Democrats and Republicans that more competition might be needed in order to limit the impact of any single firm's ratings moves on financial markets." The Journal lists the 10 eligible NRSROs, or Nationally-Recognized Statistical Ratings Organizations, along with their date founded. They are: A.M. Best (1907), Moody's (1909), S&P (1923), Fitch (1927), DBRS (1976), Kroll Bond Rating Agency (1984), Japan Credit Rating Agency (1985), Rating and Investment Info (1986), Egan-Jones Ratings (1995), and Morningstar Credit Ratings (2001).

Federated writes "S&P Downgrade Immaterial to Money Market Funds". The "Market Memo says, "Standard & Poor's downgrade of the long-term creditworthiness of the United States on Friday night took investors by surprise. For money market fund investors, the more important news was that S&P affirmed the short-term rating of the United States at A-1+, which is S&P's highest rating for short-term sovereign debt. Therefore, the downgrade of the United States' long-term debt has no material impact on Federated's money market funds. In fact, this morning, S&P affirmed that the money market funds to which it has assigned a rating are "unaffected" by the downgrade of the United States' long-term creditworthiness. U.S. Securities and Exchange Commission Rule 2a-7, which governs money market funds, does not require U.S. Treasury or government agency securities to have a long-term rating of AAA; rather, Rule 2a-7's focus is on short-term ratings. Similarly, the prospectuses of the Federated money market funds do not impose a long-term rating requirement with regard to U.S. Treasury or government agency securities. As a result, there is nothing that would force Federated's money market funds to sell U.S. Treasury or government agency securities, prohibit the funds from continuing to buy these securities, or prohibit the funds from accepting these securities as collateral for repurchase agreements."

AP features "With risk of debt default allayed, money funds remain safe bet". It explains, "Money market mutual funds have passed their first big test since the 2008 financial crisis. Risks of a US debt default sent investors fleeing the low-risk cash investments in recent weeks, stirring up memories of a money fund's collapse triggered by the bankruptcy of Lehman Brothers. This time, money funds' perceived weaknesses were their huge investments in Treasury bonds, and fears that the government might not make good on those IOUs. `As talks to lift the nation's debt ceiling stumbled, investors withdrew a net $122 billion from money funds in the seven-day period ended Monday, according to industry researcher Crane Data. That exodus trimmed almost 5 percent of the $2.6 trillion that the funds hold. It was comparable to the rush out of money funds in September 2008 when one of the largest funds collapsed, leaving investors temporarily unable to access cash and facing small losses on their investments. The debacle marred a near-perfect safety record for money market funds in terms of protecting investors from losses. There haven't been any indications that any funds have run into such troubles this time around, with no investment losses or frozen cash." Bloomberg also writes "S&P Affirming U.S. Short-Term Debt Ratings May Keep Money Markets in Check". The story says, "The decision by Standard & Poor's to affirm the U.S.'s short-term rating at the top A-1+ level even as it cut the long-term grade from AAA may help to stabilize money markets, according to strategists and economists. The move means money market funds won't be forced to sell Treasuries, said Mansoor Mohi-uddin, the Singapore-based chief currency strategist at UBS AG. The 'impact' on money funds 'appears to be limited,' Philip Marey, the senior U.S. strategist at Rabobank Groep in Utrecht, Netherlands, wrote in a report to clients. While S&P has warned since mid-July that a downgrade was likely, measures of distress in short-term funding markets have declined since then, signaling that traders expect little disruption." Finally, FT writes "Focus turns to US money market funds ", which says, "US money market funds will be keenly watched by investors and banks this week as they wait to see the reaction to S&P's long-awaited downgrade of US government debt."

ICI's weekly "Money Market Mutual Fund Assets" report says, "Total money market mutual fund assets decreased by $65.84 billion to $2.568 trillion for the week ended Wednesday, August 3, the Investment Company Institute reported today. Taxable government funds decreased by $28.19 billion, taxable non-government funds decreased by $40.90 billion, and tax-exempt funds increased by $3.25 billion." The decline ranks as the 5th largest over the past 3 years. ICI continues, "Assets of retail money market funds increased by $11.41 billion to $930.85 billion. Taxable government money market fund assets in the retail category increased by $1.43 billion to $180.08 billion, taxable non-government money market fund assets increased by $7.15 billion to $552.53 billion, and tax-exempt fund assets increased by $2.83 billion to $198.25 billion. Assets of institutional money market funds decreased by $77.25 billion to $1.637 trillion. Among institutional funds, taxable government money market fund assets decreased by $29.62 billion to $590.91 billion, taxable non-government money market fund assets decreased by $48.05 billion to $941.50 billion, and tax-exempt fund assets increased by $420 million to $105.03 billion." See our MFI Daily and August MFI for more on recent flows.

The LA Times writes "Money market funds see $103-billion outflow amid debt drama". It says, "Big investors' fears over the federal debt-ceiling drama triggered a near-record outflow of cash from money market mutual funds over the last week. Apparently worried that some money funds could suffer losses if the Treasury defaulted on some of its debts, investors yanked a net $103.2 billion from the funds in the seven days ended Tuesday, data tracker iMoneyNet Inc. said. That was close to the record $120.4 billion that exited the funds in the week ended Sept. 23, 2008, amid the financial system collapse. On a percentage basis, this week's decline was larger -- amounting to 3.9% of total fund assets of $2.63 trillion. The 2008 outflow was 3.5% of assets at the time." The article quotes Pete Crane, head of money-fund research firm Crane Data in Westborough, Mass., "It was a direct result of the debt ceiling debate and fear of default." The Times adds, "But with the debt ceiling lifted after an 11th-hour compromise in Congress, cash began to flow back into money funds on Tuesday, Crane said. Where did the money go when it left the funds? "Banks no doubt were the main beneficiaries," Crane said. Because banks can offer unlimited federal deposit insurance on non-interest-paying business accounts, institutional investors could easily park cash in those accounts with no risk of principal loss."

Bloomberg writes "Reserve's Bent Honored Among 'Visionaries' After Fund Collapse". The story says, "Bruce R. Bent, credited with inventing the retail money-market fund before presiding over the industry's highest-profile collapse, was named one of 60 'visionaries' of the mutual-fund business. Bent and the others 'helped to create the foundation of the industry and have led and protected it in the past quarter-century,' New York-based fund research firm Strategic Insight said." Bloomberg quotes Bent, "I'm pleased and honored. I don't see why my selection should be controversial.... What I did is what I did."

A press release with the unwieldy title, "Treasury Industry Leaders Counter Regulatory Reform Options with Revolutionary Self-Policing Investment Parameters as Part of an End-To-End Money Market Fund Investing Process" announced a the addition of guidelines from Treasury Strategies' white paper "The Next Generation of Money Market Fund Investing to portal provider Institutional Cash Distributors "Transparency Plus 2.1 platform upgrade. The release says, "ICD ... has integrated Treasury Strategies' new investment guideline approach for use by corporate investors as a powerful new feature in the industry leading, on-demand, compliance management and reporting application, Transparency Plus 2.1. By incorporating Treasury Strategies' guidelines, ICD is introducing the first industry application to provide treasury with an end-to-end portfolio management solution." ICD CEO Jeff Jellison comments, "The Transparency Plus system was created to provide treasurers with a means to close the risk management gaps that were so widely exposed during the financial crisis of 2008. Many of our clients were spending upwards of 80 hours per month reviewing their credit risk. Transparency Plus has virtually eliminated the manual processes associated with due diligence. Our automated tools enable treasurers to focus on analysis and decision making rather than the cumbersome processes of generating manual reports."

Reuters writes "Analysis: Money funds show resilience despite debt fears". It says, "Money market funds face uncharted waters if a debt deal is not reached soon in Washington, but Joe Morgan is not ready to abandon ship. As Chief Investment Officer of Silicon Valley Bank's asset management affiliate, Morgan keeps about $10 billion in money market funds, including $5 billion in government funds loaded with Treasury bills.... But Morgan expects that, even if the government were forced into a technical default, officials would still find a way to pay bondholders. Money fund sponsors, meanwhile, have built up enough liquidity to convince him they could manage, even if other institutional investors yanked money out of the funds.... However unlikely the chances of that, big money fund sponsors such as Fidelity Investments of Boston and Federated Investors in Pittsburgh have moved to calm investors. Both companies and others have held meetings with investors and sent out briefing papers. Some such as BlackRock and JPMorgan Chase & Co have also asked clients to reconsider guidelines, such as discussing whether limits on holding debt rated less than AAA should be revised. A Fidelity spokesman said it has stress-tested its money funds so they can withstand significant market volatility. In an emailed statement, the spokesman also said its money market funds have removed all U.S. Treasuries that mature in the first two weeks of August "to avoid volatility from the deadline" of August 2 in the Washington debt talks." See also, WSJ's "For Investors, Cash Is King".