In "Remarks by Secretary of the Treasury Janet L. Yellen at the National Association for Business Economics 39th Annual Economic Policy Conference," Yellen defends banking regulations and discusses financial stability and recent market turmoil. She comments on "Nonbanks: Money Market and Open-​End Funds," "As we strengthen the banking sector, we are also making progress on one of FSOC'​s top priorities: mitigating vulnerabilities in nonbank financial intermediation. Many of these nonbank institutions engage in liquidity and maturity transformation: they profit by issuing short-​term obligations while investing in riskier and longer-​term assets. But they are generally not regulated to account for spillovers to the rest of the financial system during times of extreme stress. There are two guiding principles in our work on nonbanks. First, policymakers should address risks regardless of where they emanate from. Substance is more important than form; similar activities that create comparable financial stability risks should be subject to comparable regulatory scrutiny. Second, policymakers should adapt and tailor policies to fit the unique structural features of the institutions and markets they are regulating. For example, systemic liquidity risks should be addressed wherever they exist. But specific policy responses should differ depending on the specific activity involved." Yellen explains, "These principles prevent risks from shifting around in the financial system in response to regulation. They enable us to address risks wherever they are found. We have pursued work on nonbanks that are both inside and outside the traditional financial system. First, let me speak on nonbanks inside the traditional system. If there is any place where the vulnerabilities of the system to runs and fire sales have been clear-​cut, it is money market funds. These funds are widely used by retail and institutional investors for cash management; they provide a close substitute for bank deposits. Before the post-​crisis reforms implemented by the SEC, all money market funds were generally expected to maintain a fixed $​1 net asset value per share. The stable NAV was normally achievable because funds were generally limited to investments that were considered to be low risk. These funds were allowed to round their share prices to $​1 when the market value of their investments fell -- as long as it stayed above a certain level. But a fund had to respond if its market value fell below that level -- that is, if it '​broke the buck.' In that case, these funds would have to reprice, and they might cease withdrawals and liquidate their assets." She comments, "This created an incentive for a run in times of extreme stress. The first redeemers could exit the fund at $​1 per share, but those who waited might be subject to a reduced market value as they are left with claims on less-​liquid assets. This created a '​first-​mover advantage' -- an incentive for investors to redeem at the whiff of a problem. During the Global Financial Crisis, anticipated losses on Lehman Brothers commercial paper led to a run on the $​62 billion Reserve Primary Fund, the oldest money market fund in the nation. Concerns about Lehman then sparked concerns about commercial paper issued by other banks. This led to runs on other money market funds. A post-​mortem report revealed that as many as 28 other funds had NAVs low enough for them to also break the buck." Yellen says, "Even without a fixed NAV, liquidity mismatch in other kinds of funds can still make them vulnerable to runs and fire sales. Open-​end funds offer daily redemptions, but some hold assets that cannot be sold quickly -- particularly in large volumes. Like money market funds, this liquidity mismatch does not typically pose problems in normal times when flows to and from funds are not outsized. But in times of market stress, shareholders are incentivized to redeem early -- before fire sales of illiquid assets lower the value of their holdings. Driven by this dynamic amid the pandemic shock, a record $​255 billion flowed out of bond mutual funds in March 2020. The structural vulnerabilities at the heart of money market and open-​end funds aren'​t new. In the banking sector, capital and liquidity requirements and federal deposit insurance reduce the likelihood of runs taking place. In case runs occur, access to the discount window helps provide buffers for banks. Yet the financial stability risks posed by money market and open-​end funds have not been sufficiently addressed." She adds, "Over the past two years, the SEC has proposed rules to mitigate the vulnerabilities plaguing these funds. The SEC'​s proposals would reduce the first-​mover advantage, reducing run incentives during times of stress. They would also require new liquidity management tools, while mandating more comprehensive and timely information on these funds for the SEC and investors. Abroad, Treasury has worked with the FSB to advance international commitments that enhance the resilience of money market funds. We will soon review the implementation -- and later the effectiveness -- of reforms taken by member jurisdictions. Treasury is also working diligently in the FSB to revise recommendations on liquidity management in open-​end funds to bolster their resilience."

Reuters posted, "Column: Shadow bank boxing as money funds drain deposits." The piece states, "Cash-​like money funds could increasingly suck deposits from smaller U.​S. banks until lagging bank savings rates are finally forced up to compete while the Federal Reserve keeps rates high for the rest of the year. Part of the so-​called '​shadow bank' complex of non-​bank financial institutions, money market funds invest largely in Treasury bills and securities yielding more than 4% for the first time in 15 years and are now far outshining what many banks are offering on deposit. A migration towards them is only peculiar in how long it took to happen." Reuters tells us, "The latest dash to these cash funds is likely a mix of unnerved depositors and institutional money fearful of the fallout for riskier assets more generally -- but the scale of the movement in recent weeks is eye-​popping. According to mutual fund data, U.​S. money fund assets under management soared by about $​312 billion in the month through last week and hit a record $​5.​132 trillion. Outside the historic cash scramble surrounding the pandemic in 2020, that was the biggest annualised monthly move to these investment bunkers since the bank crash unfolded in 2007." The article adds, "​Savings deposit rates vary across the system between the near-​zero rates at large banks still awash with deposits to slightly higher rates at small- and mid-​sized banks now struggling to retain savings. But, in contrast to money funds, the average rate across all of them, according to the Federal Deposit Insurance Corporation, is still just 0.​37%. '​If the Fed is forced to hold rates higher for longer than the market is pricing, pressure on net interest margins will likely continue as banks have to keep paying up to retain deposits," William Blair Investment Management told clients. 'The expansion in net interest margins that regional banks have enjoyed over the last several years is likely not to continue.'"

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (​with data as of March 24) includes Holdings information from 62 money funds (​down 17 from a week ago), which totals $​2.​230 trillion (​down from $​2.​541 trillion) of the $​5.​523 trillion in total money fund assets (​or 40.​4%) tracked by Crane Data. (​Our Weekly MFPH are e-​mail only and aren'​t available on the website. See our latest Monthly Money Fund Portfolio Holdings here.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (​Repo) totaling $​1.​347 trillion (​down from $​1.​479 trillion a week ago), or 60.​4%; Treasuries totaling $​554.​6 billion (​down from $​599.​4 billion a week ago), or 24.​9%, and Government Agency securities totaling $​224.​4 billion (​down from $​265.​6 billion), or 10.​1%. Commercial Paper (​CP) totaled $​46.​6 billion (​down from a week ago at $​83.​1 billion), or 2.​1%. Certificates of Deposit (​CDs) totaled $​19.​7 billion (​down from $​37.​3 billion a week ago), or 0.​9%. The Other category accounted for $​22.​8 billion or 1.​0%, while VRDNs accounted for $​15.​2 billion, or 0.​7%. The Ten Largest Issuers in our Weekly Holdings product include: the Federal Reserve Bank of New York with $​883.​5 billion (​39.​6%), the US Treasury with $​554.​6 billion (​24.​9% of total holdings), Federal Home Loan Bank with $​176.​4B (​7.​9%), Fixed Income Clearing Corp with $​144.​6B (​6.​5%), Federal Farm Credit Bank with $​44.​2B (​2.​0%), JP Morgan with $​42.​1B (​1.​9%), Barclays PLC with $​26.​2B (​1.​2%), BNP Paribas with $​24.​8B (​1.​1%), RBC with $​24.​7B (​1.​1%) and Citi with $​24.​2B (​1.​1%). The Ten Largest Funds tracked in our latest Weekly include: Goldman Sachs FS Govt ($​263.​8B), Fidelity Inv MM: Govt Port ($​161.​0B), Morgan Stanley Inst Liq Govt ($​134.​0B), BlackRock Lq FedFund ($​122.​9B), Dreyfus Govt Cash Mgmt ($​122.​0B), BlackRock Lq Treas Tr ($​108.​2B), Goldman Sachs FS Treas Instruments ($​104.​0B), Fidelity Inv MM: MM Port ($​97.​2B), Allspring Govt MM ($​91.​4B) and Invesco Govt & Agency ($​87.​1B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

"Money market funds swell by more than $​286bn amid deposit flight" says an article in the Financial Times. They write, "Goldman Sachs, JPMorgan Chase and Fidelity are the biggest winners from investors pouring cash into US money market funds over the past two weeks, as the collapse of two regional US banks and the rescue deal for Credit Suisse raised concerns about the safety of bank deposits. More than $​286bn has flooded into money market funds so far in March, making it the biggest month of inflows since the depths of the Covid-​19 crisis, according to data provider EPFR. Goldman'​s US money funds have taken in nearly $​52bn, a 13% increase, since March 9, the day before Silicon Valley Bank was taken over by US authorities. JPMorgan'​s funds received nearly $​46bn and Fidelity recorded inflows of almost $​37bn, according to iMoneyNet data as of Friday morning." The piece tells us, "The pace of inflows has accelerated in the past fortnight, particularly from large depositors looking for safe havens. While US officials agreed to backstop all of the deposits at SVB and Signature Bank, which failed the same weekend, they have not guaranteed those above $​250,​000 at other institutions.... The surge in flows this month helped push overall assets in money funds to a record $​5.​1tn on Wednesday, according to research from Bank of America. Data from the Investment Company Institute shows the money is flowing specifically into funds that hold US government debt, which are considered the safest destinations. So-​called prime funds, which hold bank debt and corporate paper, have had small outflows.... Federal Reserve data released on Friday showed bank deposits declined in the week through March 15, from $​17.​6tn to $​17.​5tn, and deposits at small banks declined from $​5.​6tn to $​5.​4tn." The FT quotes Vanguard'​s Sara Devereux, "Money market funds have seen remarkable flows in recent weeks, with the largest flows into government money market funds. Part of that is because of a flight to quality after the scare with bank closures, but it'​s also because yields for money markets are currently very attractive."

The Washington Post published, "Bye, banks: Recent turmoil is spurring many to move their money." They write, "Bank stocks sank Friday over fresh fears that another European financial giant may be in trouble, compounding worries of a broader crisis that have led people to move hundreds of billions of dollars out of U.​S. bank accounts. Overall, deposits estimated at $​550 billion have moved from smaller and regional banks to large banks and money market funds in the two weeks since Silicon Valley Bank and Signature Bank failed, according to an analysis by JPMorgan Chase." They quote a financial advisor, "Turmoil in the markets always puts money in motion.... The big concern right now is: Is my money safe? How can I make it safer? People who have cash in simple savings accounts are using this as an opportunity to move their money." The Post piece continues, "​A broader crisis so far doesn'​t seem to have come, and the U.​S. government has taken great pains to reassure depositors that bank accounts are safe. But that hasn'​t stopped people from shifting their money around. Americans are moving hundreds of billions of dollars out of banks -- especially smaller regional banks -- into larger institutions, as well as money market funds, government bonds, high-​yield online savings accounts, even cryptocurrencies and gold. In the two weeks since SVB'​s dramatic collapse, investments in money market funds, a type of mutual fund focused on low-​risk securities, have ballooned by nearly $​240 billion, according to the Investment Company Institute." It tells us, "In all, small and medium U.​S. banks lost $​120 billion in deposits, or 2 percent, in the week of SVB'​s collapse, Federal Reserve data shows. (​At least some of those deposits went directly to the country'​s largest banks, which gained $​66 billion in deposits during that period.) About 12 percent of Americans say they have taken money out from the bank '​because of the collapse of Silicon Valley Bank,' and 18 percent say they are considering doing so, according to a Yahoo News/​YouGov poll released Tuesday. (​It is also worth noting, though, that most people — 55 percent — said they are confident the banking system is safe.)"

ICI'​s most recent "Money Market Fund Assets" report shows money fund totals jumping $​117 billion in the latest, breaking over the $​5.​1 trillion barrier for the first time ever, after jumping $​121 billion the week prior. The past 2 weeks were the 5th and 6th largest weekly increases ever and the largest in history if you exclude 4 coronavirus lockdown panic weeks in March and April 2020. The failure of Silicon Valley Bank has raised concerns over uninsured bank deposits, and large investors are fleeing into money funds. Over the past 52 weeks, money fund assets have risen $​571 billion, or 12.​5%, with Retail MMFs rising by $​426 billion (​29.​7%) and Inst MMFs rising by $​145 billion (​4.​7%). ICI shows assets up by $​397 billion, or 8.​4%, year-​to-​date in 2023, with Institutional MMFs up $​213 billion, or 7.​0% and Retail MMFs up $​184 billion, or 11.​1%. The weekly release says, "Total money market fund assets increased by $​117.​41 billion to $​5.​13 trillion for the week ended Wednesday, March 22, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $​131.​84 billion and prime funds decreased by $​10.​83 billion. Tax-​exempt money market funds decreased by $​3.​61 billion." ICI'​s stats show Institutional MMFs surging $​102.​2 billion (​after jumping $​100.​8 billion the prior week) and Retail MMFs rising $​15.​2 billion (​after an increase of $​20.​2 billion) in the latest week. Total Government MMF assets, including Treasury funds, were $​4.​260 trillion (​83.​0% of all money funds), while Total Prime MMFs were $​765.​3 billion (​14.​9%). Tax Exempt MMFs totaled $​107.​0 billion (​2.​1%). ICI explains, "Assets of retail money market funds increased by $​15.​21 billion to $​1.​86 trillion. Among retail funds, government money market fund assets increased by $​26.​80 billion to $​1.​26 trillion, prime money market fund assets decreased by $​9.​10 billion to $​506.​55 billion, and tax-​exempt fund assets decreased by $​2.​49 billion to $​96.​40 billion." Retail assets account for over a third of total assets, or 36.​3%, and Government Retail assets make up 67.​6% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $​102.​20 billion to $​3.​27 trillion. Among institutional funds, government money market fund assets increased by $​105.​04 billion to $​3.​00 trillion, prime money market fund assets decreased by $​1.​72 billion to $​258.​78 billion, and tax-​exempt fund assets decreased by $​1.​12 billion to $​10.​55 billion." Institutional assets accounted for 63.​7% of all MMF assets, with Government Institutional assets making up 91.​8% of all Institutional MMF totals. According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets increased by $​261.​1 billion month-​to-​date through 3/​22 to a record $​5.​514 trillion. (​Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re over $​400 billion lower than Crane'​s asset series.)

The Fed'​s most recent release, entitled, "Federal Reserve issues FOMC statement" tells us, "​Recent indicators point to modest growth in spending and production. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated. The U.​S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks." It explains, "​The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-​3/​4 to 5 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-​backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective." The Fed'​s statement adds, "​In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee'​s goals. The Committee'​s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments." Watch for money market fund yields to move higher in coming days as the latest Fed hike gets digested.

Morningstar writes on "`​Why Ultrashort Bond Funds Aren'​t Cash Substitutes," which tells us, "​With interest rates now running well above their 2021 lows, investor interest is perking up in the short end of the yield curve. CDs, money market funds, and other cashlike assets are finally generating attractive yields for the first time in decades. At the same time, however, investors have sold off ultrashort bond funds, which focus on investment-​grade bonds with shorter-​term durations (​typically less than one year). The category -- which raked in more than $​260 billion in cumulative net inflows over the 10-​year period ended in 2021 -- suffered about $​9.​2 billion in net outflows during 2022. These outflows suggest a potential mismatch between investors' expectations for safety and the performance they actually received. In this article, I'​ll delve into why ultrashort bond funds aren'​t a cash substitute." Author Amy Arnott says, "[U]​ltrashort bond funds haven'​t matched the smooth ride offered by true cash assets.... That was particularly true in 2008, when the average ultrashort bond fund dropped 8.​4%.... A few high-​profile funds, such as Schwab YieldPlus, dropped even more. The fund had one of the highest yields in its category and was sold as a safe, higher-​yielding alternative to money market funds. As the mortgage market unraveled in 2008, however, it lost more than 35%.... Fidelity Ultra-​Short Bond Fund, which lost 7.​8% in 2008, and SSgA Yield Plus, which lost 13.​4% in 2007, suffered from similar issues, although the damage was less severe. All three funds have since been discontinued." The piece comments, "Although the disastrous results from the financial crisis haven'​t been repeated, ultrashort bond funds again wavered during the pandemic-​driven downturn in early 2020. While most investment-​grade bond categories posted positive returns during the market'​s flight to quality, the average ultrashort bond fund lost about 1.​8% in the first quarter." It adds, "As resurgent inflation prompted the Federal Reserve to repeatedly hike interest rates during 2022, ultrashort bond funds were relatively resilient.... [​T]​hey had small losses during the first two quarters but made back most of their losses by the end of the year. As rates rose, portfolio managers for ultrashort funds were able to reinvest proceeds from maturing bonds at higher yields, offsetting some of their previous losses. Because of their somewhat spotty history, ultrashort bond funds aren'​t the best holding for short-​term cash needs.... If a fund offers a higher-​than-​average yield, it'​s likely taking on more risk to do so -- either by dipping into corporate bonds with middling credit quality or investing in more credit-​sensitive sectors, such as structured credits. Investors will likely get a smoother ride in ultrashort bond funds that avoid esoteric strategies and maintain a sizable Treasury buffer, such as Baird Ultra Short Bond (​BUBSX), Pimco Enhanced Short Maturity Active ETF (​MINT), and Pimco Enhanced Short Maturity Active ESG ETF (​EMNT), which have Morningstar Analyst Ratings of Gold."

This weekend'​s Barron'​s features the article, "SVB Collapse Creates New Risk for Tech'​s Billions in Cash," which tells us, "As Silicon Valley Bank slid into receivership this month, one of the most unsettling disclosures was the large number of companies with bank deposits in excess of the $​250,​000 covered by federal deposit insurance. In the most startling example, the streaming video company Roku revealed that it had $​487 million parked there, about 26% of its total corporate cash. 'At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB,' Roku said in a securities filing. Those were scary words until the government came to the rescue of Roku and hundreds of other SVB depositors with accounts in excess of $​250,​000, vowing to make them whole. But the disclosures raise questions, not least of which is what other large companies are doing with all their cash." The piece continues, "​It'​s no small market. According to Carfang Group, a treasury management consulting firm, U.​S. companies currently hold about $​3.​6 trillion in cash on their balance sheets, soaring over the last two decades, from about $​1 trillion in 2000. Just the five megacap tech companies alone -- Apple (​AAPL), Microsoft (​MSFT), Alphabet (​GOOGL), Amazon.​com (​AMZN), and Meta Platforms (​META) -- hold more than $​500 billion worth of cash and marketable securities. The financial tech execs I spoke with, who asked not to be identified, noted that it'​s not unusual for larger companies to have hundreds or even thousands of bank accounts. Companies with geographically vast footprints and large daily cash deposits -- think of large retailers like Walmart or Costco Wholesale -- require a vast network of banks, often in places where larger banks don'​t have operations. Countries with far-​flung international operations need local banks in every market, with multiple banks in China and other large countries." Barron'​s explains, "​Here are some takeaways on how tech companies approach managing cash, according to senior execs I spoke with. The wisest course of action, they say, is to invest the cash in money-​market funds backed by government securities -- or through direct purchases of short-​term Treasuries, either through intermediaries or through the government'​s TreasuryDirect program. This generally cuts out the banks.... Several treasurers I spoke with said they use the money management portal from a company called Institutional Cash Distributors to access money-​market funds from larger issuers like BlackRock, BNY Mellon, State Street, and others. They note that ICD provides a dashboard that makes it easy to invest in multiple money funds, spreading the risks, while getting detailed information on the combined nature of their holdings, in terms of duration, geography, credit ratings, returns, and issuers. They also noted that issuers pay a fee to ICD, but investors pay ICD nothing, with very low management fees on the funds." Finally, the story adds, "The primary goal for any corporate CFO or treasurer is capital preservation. A year ago, when rates were close to zero, there was no opportunity to generate a return on corporate cash. In the current environment, that cash can now generate a return that can be a useful addition to net income. But investors aren'​t buying tech stocks for their ability to squeeze extra dollars from cash balances, and there is little reason to take on additional risk to do it, despite the temptation to reach for yield. Tech companies may have piles of cash, but they aren'​t banks. They should be using their capital to innovate. Not speculate."

A release from the Investment Company Institute tells us that, "Retirement Assets Total $​33.​6 Trillion in Fourth Quarter 2022." It includes data tables showing that money market funds held in retirement accounts rose to $​602 billion (​from $​583 billion) in total, or 13% of the total $​4.​777 trillion in money funds. MMFs represent just 5.​9% of the total $​10.​136 trillion of mutual funds in retirement accounts. This release says, "Total US retirement assets were $​33.​6 trillion as of December 31, 2022, up 3.​9 percent from September but down 14.​7 percent for the year. Retirement assets accounted for 30 percent of all household financial assets in the United States at the end of December 2022. Assets in individual retirement accounts (​IRAs) totaled $​11.​5 trillion at the end of the fourth quarter of 2022, an increase of 3.​9 percent from the end of the third quarter of 2022. Defined contribution (​DC) plan assets were $​9.​3 trillion at the end of the fourth quarter, up 4.​3 percent from September 30, 2022. Government defined benefit (​DB) plans—​including federal, state, and local government plans -- held $​7.​6 trillion in assets as of the end of December 2022, a 4.​3 percent increase from the end of September 2022. Private-​sector DB plans held $​3.​1 trillion in assets at the end of the fourth quarter of 2022, and annuity reserves outside of retirement accounts accounted for another $​2.​2 trillion." The ICI tables also show money funds accounting for $​428 billion, or 9%, of the $​5.​006 trillion in IRA mutual fund assets and $​174 billion, or 3%, of the $​5.​130 trillion in defined contribution plan holdings. (​Money funds in 401k plans totaled $​120 billion, or 3% of the $​4.​049 trillion of mutual funds in 401k'​s.)

MarketWatch writes, "Cash in your brokerage account may be costing you thousands." The article says, "Savers rethinking their cash options amid rising rates and recent bank failures shouldn'​t overlook their brokerage '​sweep' accounts. Many brokerage firms automatically sweep customers' uninvested cash into bank-​deposit vehicles that may come with federal deposit insurance coverage but offer yields that in many cases have remained stubbornly low even as the Federal Reserve aggressively hikes rates. At Morgan Stanley, for example, sweep rates start at 0.​01%, rising to 0.​5% for cash of $​5 million and above, whereas the average money market mutual fund yields well over 4%. Money market funds do not come with FDIC coverage but invest in very high-​quality, short-​term debt and aim to maintain a steady $​1 share price." It tells us, "The yield gap between brokerage sweep accounts and the 100 largest taxable money market funds hit a record high of just under 4 percentage points at the end of February, according to research firm Crane Data, with the sweep vehicles yielding an average 0.​43% and the money funds 4.​39%.... Some brokerage firms have been able to keep sweep rates low in part because investors see these vehicles as very short-​term parking spots for cash and don'​t focus on the yield. 'Most people in cash think they'​re only going to be there a matter of weeks,' said Peter Crane, president of Crane Data. '​But over time, the balances add up.'" The MarketWatch piece also comments, "The yawning yield gap means that investors leaving substantial sums in brokerage sweep accounts for any length of time should reassess their options, experts say. Brokerage firms' default sweep vehicles may be convenient and often provide the safety of FDIC insurance. But '​it'​s not like they'​re holding you hostage,' Crane said. Indeed, many small investors in recent months have switched cash over from brokerage sweep vehicles to money-​market funds, he said, helping to drive money-​fund assets to a record of more than $​5.​3 trillion in mid-​March." Finally, the article adds, "The failure over the past week of Silicon Valley Bank and Signature Bank may only accelerate a broader trend of savers yanking money from lower-​yielding bank deposits, said Ken Tumin, senior industry analyst at LendingTree. Particularly for those with cash balances over the $​250,​000 FDIC limit, 'it might be another reason for them to expedite movement over to T-​bills and money market funds,' he said, as the yield differences and stability concerns dampen savers' enthusiasm for keeping large balances in bank deposits. Low brokerage sweep rates were already drawing scrutiny a year ago when the Fed started raising rates. Massachusetts Secretary of the Commonwealth William Galvin in March 2022 directed the state'​s securities division to investigate brokerage firms' sweep account rates. Letters sent to a half-​dozen brokerage firms, including Bank of America'​s Merrill and LPL Financial asked whether the firms intended to increase their sweep rates and how risks and any conflicts of interest associated with the sweep programs were disclosed to customers, among other issues. Sweep account rates used to be more competitive with money market funds, but as brokerage firms have shifted to zero-​commission trading, they'​ve become more dependent on sweep revenues, Crane said. In some cases, a sweep vehicle may funnel deposits into a brokerage firm'​s affiliated bank and boost profits for the parent company."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Wednesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (​with data as of March 10) includes Holdings information from 45 money funds (​down 16 from two weeks ago), which totals $​1.​355 trillion (​down from $​1.​724 trillion) of the $​5.​291 trillion in total money fund assets (​or 25.​6%) tracked by Crane Data. (​Our Weekly MFPH are e-​mail only and aren'​t available on the website. See our latest Monthly Money Fund Portfolio Holdings here.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (​Repo) totaling $​843.​6 billion (​down from $​1.​017 trillion two weeks ago), or 62.​3%; Treasuries totaling $​294.​9 billion (​down from $​391.​3 billion two weeks ago), or 21.​8%, and Government Agency securities totaling $​101.​2 billion (​down from $​147.​0 billion), or 7.​5%. Commercial Paper (​CP) totaled $​51.​7 billion (​down from two weeks ago at $​69.​3 billion), or 3.​8%. Certificates of Deposit (​CDs) totaled $​19.​1 billion (​down from $​27.​7 billion two weeks ago), or 1.​4%. The Other category accounted for $​33.​2 billion or 2.​4%, while VRDNs accounted for $​10.​9 billion, or 0.​8%. The Ten Largest Issuers in our Weekly Holdings product include: the Federal Reserve Bank of New York with $​562.​9 billion (​41.​6%), the US Treasury with $​294.​9 billion (​21.​8% of total holdings), Fixed Income Clearing Corp with $​67.​2B (​5.​0%), Federal Home Loan Bank with $​59.​6B (​4.​4%), Federal Farm Credit Bank with $​39.​4B (​2.​9%), JP Morgan with $​29.​5B (​2.​2%), RBC with $​23.​8B (​1.​8%), Goldman Sachs with $​20.​5B (​1.​5%), Mitsubishi UFJ Financial Group Inc with $​17.​3B (​1.​3%) and Barclays PLC with $​14.​8B (​1.​1%). The Ten Largest Funds tracked in our latest Weekly include: Fidelity Inv MM: Govt Port ($​145.​2B), Morgan Stanley Inst Liq Govt ($​130.​2B), Dreyfus Govt Cash Mgmt ($​119.​3B), Fidelity Inv MM: MM Port ($​103.​6B), Allspring Govt MM ($​89.​8B), Invesco Govt & Agency ($​85.​5B), First American Govt Oblg ($​66.​7B), State Street Inst US Govt ($​66.​0B), Fidelity Inv MM: Treas Port ($​49.​8B) and Dreyfus Treas Sec Cash Mg ($​43.​9B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

Yesterday, ignites published the piece, "Money Funds on Edge Amid Fears of SVB, Signature Contagion." They write, "​The Friday collapse of Silicon Valley Bank and related fall on Sunday of Signature Bank sparked volatile markets on Monday amid fears of potential contagion to other banks and sectors of the economy. Money market funds, which experienced a run at the onset of the pandemic in March 2020, on Monday appeared to be weathering the tumult. '​Risk everywhere has increased noticeably [​due to the bankruptcies], but money market funds are several levels removed from the tip of the spear here,' said Peter Crane, chief executive of Crane Data." The article continues, "Money funds represented $​5.​2 trillion in assets as of Friday, according to Crane Data. Investors pulled about $​7 billion from the funds that day [​Friday], which Crane characterized as '​minimal,' given the products' huge asset base. Investors yanked about $​100 billion from institutional prime money funds during a two-​week period in March 2020." [Note: Crane Data'​s MFI Daily showed a very big jump in assets on Monday, March 13, though, with MMFs rising $​37.​7 billion to a record $​5.​328 trillion.] Federated Hermes' Deborah Cunningham tells ignites, "​As of Monday, the firm'​s money funds had not been materially impacted by those holdings, she said.... Federated Hermes also spent time on Monday trying to reassure its money fund shareholders that '​the profile of SVB versus the profile of the banking institutions that are high-​quality, minimal credit risk that we use in money market fund portfolios are vastly different,' Cunningham said." The article says, "Money funds '​ought to be better positioned than during the global financial crisis due to regulatory changes,' Stephen Dover, chief investment strategist at Franklin Templeton Institute, wrote in a Sunday update.... Money funds may even see an increase in assets from investors seeking a safe haven during the current bout of market stress, Crane said. The biggest impact from the bank collapses may be on whether the Fed changes course with its tightening policy, which aims to rein in record-​high rates of inflation. When interest rates fall, money funds often get an initial '​burst of assets' because investors seek to buy the lag, essentially buying older, higher-​yielding securities that money funds hold, Crane said." See also Barron'​s latest news piece, "People Are Flocking Into Money-​Market Funds. There'​s a Small Risk."

Money fund yields were flat last week after jumping last month following the Fed'​s 25 basis point hike on Feb. 1. Our Crane 100 Money Fund Index (​7-​Day Yield) was unchanged at 4.​40% in the week ended Friday, 3/​10. Yields rose by 1 basis point the previous week and they'​re up from 4.​15% on Jan. 31, 2023. Money fund yields have risen from 4.​05% on 12/​31/​22, from 3.​59% on Nov. 30, from 2.​88% on Oct. 31 and from 2.​66% on Sept. 30. Yields should be flat in coming days, and it'​s now unclear whether the Fed will hike rates again at its next meeting on March 22. The top-​yielding money market funds remain flat at just over 4.​70%. (​See our "Highest-​Yielding Money Funds" table above). The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 687), shows a 7-​day yield of 4.​30%, up 2 bps in the week through Friday. Prime Inst MFs were up 1 bp at 4.​50% in the latest week. Government Inst MFs rose by 3 bps to 4.​36%. Treasury Inst MFs up 2 bps for the week at 4.​34%. Treasury Retail MFs currently yield 4.​12%, Government Retail MFs yield 4.​06%, and Prime Retail MFs yield 4.​32%, Tax-​exempt MF 7-​day yields were down at 2.​04%. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​3/​10), just 48 money funds (​out of 823 total) yield between 0.​00% and 1.​99% with $​18.​3 billion, or 0.​3%; 89 funds yield between 2.​00% and 2.​99% with $​103.​3 billion, or 2.​0%; 97 funds yield between 3.​00% and 3.​99% ($​76.​2 billion, or 1.​4%), and 589 funds yield 4.​0% or more ($​5.​093 trillion, or 96.​3%). Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​54% after decreasing 1 bp the week before. The latest Brokerage Sweep Intelligence, with data as of March 10, shows that there was no changes over the past week. Just 3 of 11 major brokerages still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley. See also, The Wall Street Journal'​s "Individual Investors Pile Into Cash, Chasing Higher Returns" and "Savers Pile Money Into Bank CDs as Rates Top 5%."

Reuters writes that, "Breakingviews: SVB dies, but its disease lives on," which says, "Nearly three years with no U.​S. bank failures just came to an unseemly end. Silicon Valley Bank, which counts among its customers half of all U.​S. venture-​capital backed startups, was taken into receivership by the Federal Deposit Insurance Corp on Friday after a slide in deposits and a hasty capital raising failed to restore confidence. By acting quickly, regulators have stopped one crisis, but may have laid the groundwork for more." They explain, "​Customers in American banks typically don'​t have to worry about what happens if a lender goes under, thanks to a guarantee from Uncle Sam to pay back depositors if an institution fails. But there'​s a big exception. Balances over $​250,​000 aren'​t covered. Above that level, customers must fight with other creditors for scraps." Reuters tells us, "The bank owned by SVB Financial (​SIVB.​O) relied more heavily on large, and therefore, uninsured, deposits than other banks. Some 94% of the funds held at SVB weren'​t guaranteed at the end of 2022, according to its regulatory filings, compared with 52% at JPMorgan (​JPM.​N), and 58% at Silvergate Bank, a crypto-​focused lender that is also closing its doors this week after depositors turned tail." They write, "Anyone with uninsured deposits is now, effectively, on notice that these balances aren'​t guaranteed when push comes to shove. That message probably gets forgotten in peacetime. And while few banks have the concentration of tech-​sector risk that made SVB'​s customers lose their nerve, many have a substantial reliance on deposits that are now revealed to be anything but rock solid. If the regulators' goal was to make mega-​banks like JPMorgan and Bank of America (​BAC.​N) even bigger, they couldn'​t have found a better way." See also our March 2 News, "MF Yields Up 25 Bps, Record Assets in Feb.; FDIC Quarterly; Cunningham," the FDIC'​s release on Silicon Valley Bank, "FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California" and the release, "Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC."

ICI'​s latest weekly "Money Market Fund Assets" report shows money funds flat in the latest week, after skyrocketing to a record $​4.​9 trillion the previous week. Over the past 52 weeks, money fund assets have risen $​318 billion, or 7.​0%, with Retail MMFs rising by $​342 billion (​23.​0%) and Inst MMFs falling by $​24 billion (-​0.​8%). ICI shows assets up by $​159 billion, or 3.​4%, year-​to-​date in 2023, with Institutional MMFs up $​10 billion, or 0.​3% and Retail MMFs up $​149 billion, or 8.​9%. The weekly release says, "Total money market fund assets decreased by $​23 million to $​4.​89 trillion for the week ended Wednesday, March 8, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $​13.​89 billion and prime funds increased by $​12.​71 billion. Tax-​exempt money market funds increased by $​1.​15 billion." ICI'​s stats show Institutional MMFs falling by $​13.​5 billion and Retail MMFs rising $​13.​5 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​3.​983 trillion (​81.​4% of all money funds), while Total Prime MMFs were $​794.​2 billion (​16.​2%). Tax Exempt MMFs totaled $​116.​2 billion (​2.​4%). ICI explains, "Assets of retail money market funds increased by $​13.​48 billion to $​1.​83 trillion. Among retail funds, government money market fund assets increased by $​2.​51 billion to $​1.​20 trillion, prime money market fund assets increased by $​10.​32 billion to $​525.​29 billion, and tax-​exempt fund assets increased by $​651 million to $​103.​28 billion." Retail assets account for over a third of total assets, or 37.​3%, and Government Retail assets make up 65.​6% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $​13.​51 billion to $​3.​07 trillion. Among institutional funds, government money market fund assets decreased by $​16.​40 billion to $​2.​79 trillion, prime money market fund assets increased by $​2.​39 billion to $​268.​92 billion, and tax-​exempt fund assets increased by $​499 million to $​12.​94 billion." Institutional assets accounted for 62.​7% of all MMF assets, with Government Institutional assets making up 90.​8% of all Institutional MMF totals. According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets increased by $​67.​4 billion for the month of February (​through 2/​28/​23), and they rose another $​27.​0 billion over the first 8 days of March to $​5.​279 trillion. (​Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re over $​400 billion lower than Crane'​s asset series.)

Bloomberg Intelligence posted an article entitled, "Cash Is King: '​Cash' Hoarding Grows to Record in ETFs as Distributions Rise." It explains, "Assets in cash-​like ETFs have climbed to a record $​87 billion after one their best months of flows. Cash alternatives like the SPDR Bloomberg 1-​3 Month T-​Bill ETF have outperformed 90% of all ETF strategies over the past 12 months, and increased distribution payouts are luring more investors deterred by equity-​market volatility." (Note: Ultra-​short "​cash" ETFs will be a major topic at our upcoming Crane'​s Bond Fund Symposium, which takes place March 23-​24, 2023, in Boston, Mass. Click here for details.) The piece tells us, "Assets in cash-​like ETFs with a duration of one year or less have reached a new high of $​87 billion, with inflows driven by volatile equity markets. Assets may stay elevated given higher yields than in the past. Positions tend to rise and fall based on the S&​P 500'​s relationship to its 200-​day moving average and overall market sentiment. Though the index is still above the 200-​day threshold, assets in ultra-​short cash-​like ETFs have climbed, and a more sustained bull market may be needed to attract flows back into equities.... Allocating to ultra-​short term bond ETFs has sheltered investors from market declines, with 90% of ETFs lagging behind the SPDR Bloomberg 1-​3 Month T-​Bill ETF (​BIL) over the past 12 months -- the highest reading since 2018. The figure dipped below 10% in early 2021." Bloomberg says, "Fixed-​income ETFs with the shortest duration accounted for one of the highest percentages of total ETF flows historically in February. The ultra-​short category took in $​9.​5 billion, while the industry overall added just $​7.​7 billion due to widespread outflows.... Ultra-​short ETFs, in addition to providing shelter from market volatility, have begun to pay out larger monthly distributions -- another reason why investors may be reluctant to pull money out of the category. Recent dividend payouts were the highest since we began tracking them in 2020. The group'​s average indicated yield is just over 3.​5%."

Refinitiv Lipper published a brief entitled, "Money Market Funds Are Breaking Start-​of-​Year Flow Trends." Senior Research Analyst Jack Fischer writes, "Since 2010, money market funds have been the recipient of year-​end cash flows in all but one year (​2016) with an average December monthly inflow of $​47.​5 billion. Investors typically tax-​loss harvest at the end of a calendar year which theoretically leads to an influx of capital at the start of the year. Since 2010, the average total outflows between the first two months of a year are $​30.​4 billion. Of the 14 starts to a year since January 2010, only four have led to net inflows over January and February (​2016, 2019, and 2023). The total inflows since the start of the year for money market funds are now at $​49.​0 billion which would be the largest inflow over the first two months of a calendar year since 2008 (+$​275.​2 billion)." He continues, "Equity funds and taxable income funds tend to be the benefactors of the money market outflows over the first two months. Since 2010, equity funds have averaged $​33.​8 billion while only logging one January/​February net outflow. Taxable fixed income funds have also only seen one outflow over the two-​month start of a year with an average of $​50.​0 billion over the same time span. In 2023, equity funds are poised to suffer their second two-​month outflow (-$​19.​7 billion) as taxable fixed income (+$​36.​6 billion) is standing its ground, although below their 14-​year average." Refinitiv Lipper adds, "Money market funds have realized two of their top 20 weekly inflows of all time this year. Since the start of 2022, money market funds have been the only asset class to attract positive weekly net flows (+$​552.​6 million)—​equity funds (-$​2.​7 billion), taxable fixed income (-$​2.​4 billion), and tax-​exempt fixed income (-$​1.​3 billion) have all averaged weekly outflows over the same stretch. Lipper has 11 money market classifications, and not all are built the same. The money market funds with a greater allocation to Treasuries and government debt have seen persistent outflows over the past year whereas the Lipper classification with certificates of deposit (​CDs) and commercial paper (​CP) have seen significant inflows. The interesting part is that the Lipper Money Market Fund classification has the highest average expense ratio (​0.​65%) and Lipper Institutional U.​S. Government Money Market Funds currently have the lowest average expense ratio (​0.​25%). We all know fees matter, but right now, in this world, fees don'​t seem to matter as much as portfolio allocation towards relatively less liquid issues that benefit greater in a rising interest rate environment. Lipper Money Market Funds set a monthly intake record in January (+$​45.​5 billion) and are on pace to post their third-​largest monthly inflow in February (+$​39.​7 billion)."

Money fund yields inched higher last week after jumping last month following the Fed'​s 25 basis point hike on Feb. 1. Our Crane 100 Money Fund Index (​7-​Day Yield) rose 1 basis point to 4.​40% in the week ended Friday, 3/​3. Yields rose by 2 basis points the previous week and they'​re up from 4.​15% on Jan. 31, 2023. Money fund yields have risen from 4.​05% on 12/​31/​22, from 3.​59% on Nov. 30, from 2.​88% on Oct. 31 and from 2.​66% on Sept. 30. Yields should be flat in coming days, but they should jump again following the Fed'​s next meeting on March 22. The top-​yielding money market funds have broken above 4.​70% and should move towards 5.​0% in April. (​See our "Highest-​Yielding Money Funds" table above). The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 681), shows a 7-​day yield of 4.​28%, up 1 bp in the week through Friday. Prime Inst MFs were unchanged at 4.​49% in the latest week. Government Inst MFs rose by 2 bps to 4.​33%. Treasury Inst MFs up 2 bps for the week at 4.​32%. Treasury Retail MFs currently yield 4.​10%, Government Retail MFs yield 4.​05%, and Prime Retail MFs yield 4.​32%, Tax-​exempt MF 7-​day yields were down at 2.​58%. According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​3/​3), just 6 money funds (​out of 816 total) yield between 0% and 1.​99% with $​456 million, or 0.​0%; 125 funds yield between 2.​00% and 2.​99% with $​118.​4 billion, or 2.​2%; 110 funds yield between 3.​00% and 3.​99% ($​85.​5 billion, or 1.​6%), and 575 funds yield 4.​0% or more ($​5.​065 trillion, or 96.​1%). Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, dropped 1 bp to 0.​54% after increasing the week before. The latest Brokerage Sweep Intelligence, with data as of March 3, shows that there was one change over the past week. RW Baird decreased rates to 1.​68% for all balances between $​1K and $​999K, to 2.​58% for balances between $​1 million and $​1.​99 million, and to 3.​32% for all balances over $​5 million. Just 3 of 11 major brokerages still offer rates of 0.​01% for balances of $​100K (​and lower tiers). These include: E*​Trade, Merrill Lynch and Morgan Stanley.

A Prospectus Supplement filing for the HSBC U.​S. Government Money Market Fund (​Class P Shares – HGPXX), HSBC U.​S. Treasury Money Market Fund (​Class P Shares – HTPXX) and the HSBC ESG Prime Money Market Fund (​Class D Shares – HEDXX, Class I Shares – HEIXX, Intermediary Class Shares – HEGXX, Intermediary Service Class – HETXX, Class Y Shares – HEYXX and Class P Shares – HPPXX) tells us, "The Class P Shares of HSBC U.​S. Government Money Market Fund and the HSBC U.​S. Treasury Money Market Fund have not yet commenced operations and therefore are not currently being offered by HSBC Funds. The HSBC ESG Prime Money Market Fund has not yet commenced operations and therefore it is not currently being offered by HSBC Funds." The new P share classes will have 0.​18% expense ratios after fee waivers according to the Form N-​1A Prospectus filing. In other news, a filing for Federated Hermes Government Reserves Fund B (​GRBXX) tells us, "On November 10, 2022, the Boards of Trustees/​Directors of the Federated Hermes Funds listed below approved a Plan of Conversion for the Class B Shares of the Funds pursuant to which the Class B Shares of each of the Funds will be converted into each Fund'​s existing Class A Shares on or about February 3, 2023, resulting in the closure and termination of the Funds' Class B Shares. In approving the conversion, the Board determined that the conversion of the Class B Shares into Class A Shares is in the best interests of the shareholders of the Class B Shares. The Funds' Class B Shares were previously closed to new investments and new accounts, with the exception of exchanges by existing Class B shareholders." It adds, "Pursuant to the Plan of Conversion, Class B shareholders will automatically receive shares of Class A Shares in exchange for their Class B Shares without any fee, load or charge to the shareholder, including any contingent deferred sales charges, on or about February 3, 2023. Future purchases of Class A Shares will be at the applicable sales load schedule. Shareholders should consult their Fund’​s prospectus for additional information regarding Class A sales loads and other expenses."

An op-​ed commentary piece in The Wall Street Journal entitled, "Unleash the Banks in Times of Crisis," tells us, "​Since the U.​S. Treasury market froze in March 2020 at the outset of the Covid crisis, policy makers have been laudably concerned with improving that market'​s liquidity. But as two of the people in the engine room during that fateful month, we believe there is a broader concern: the structural implications of our financial system'​s increasing reliance on short-​term wholesale funding." Authors Justin Muzinich and Randal Quarles explain, "​Today, short-​term wholesale funding is one of the main ways that large companies finance their operations. Large enterprises regularly issue commercial paper: short-​term notes that generally have a life of 30 to 90 days, which the companies expect to renew at maturity. The odds of something happening to the credit of a large, stable public company within 30 days are low, so the company can issue this paper more cheaply than it could get credit from a bank. The efficiency of this system supports a more robust and faster-​growing economy than one purely reliant on bank credit -- until it doesn'​t. Short-​term wholesale funding is vulnerable to sudden shocks. A market surprise can make buyers reluctant to renew a company'​s maturing commercial paper. The source of the shock can be anything. In the Penn Central railroad crisis of 1970, it was the bankruptcy of a major commercial-​paper issuer; in the financial crisis of 2008, it was the rapid reversal of confidence in the value of mortgages; in 2020 it was Covid; in some future crisis it could be a geopolitical event." They write, "The shock and subsequent nonrenewal of maturing commercial paper can transform a short period of financial uncertainty into a long-​term strain on the real economy. Even a brief interruption of commercial-​paper issuance can suddenly remove funding for large enterprises, potentially triggering a cascade of defaults. Many of these large companies then seek funding from banks, using up available liquidity during a stressful period and making funds less available for small- and medium-​size businesses. As this short-​term market shock threatens to spread through the economy, the government is often forced to step in using taxpayer money. But these government rescues at the very least create moral hazard, and at worst don'​t work." The piece says, "For instance, in March 2020 commercial-​paper investors halted investments because of the market uncertainty introduced by Covid lockdowns, creating a run on the money-​market funds holding that paper. In response, the Federal Reserve and Treasury tried three times in a 60-​hour period to craft a money-​market-​fund liquidity program to stanch a potential collapse of the money-​market fund system. The third attempt finally succeeded. The program provided loans that the Fed secured by commercial paper and other assets of the money-​market funds, coupled with a $​10 billion commitment from the Treasury to cover any losses the Fed might incur. This effort stopped the run, but as Wellington said of Waterloo, it was a close-​run thing." It adds, "There is a better way to deal with the uncertainty posed by short-​term wholesale funding than relying on the government as a backstop.... But the overcalibrated capital and liquidity requirements imposed by policy makers in the aftermath of the Dodd-​Frank Act of 2010 have limited the ability of banks to step in when the nonbank system falters. By adjusting some of those requirements during times of crisis, we can encourage a more fluid transfer of funds between banks and the market. This approach has already proved successful: In March 2020, we led the bank regulators in temporarily easing the leverage-​ratio requirements to allow the banks to accept the deposits that were flowing in from elsewhere in the system and successfully deploy them in support of the real economy. We should codify this precedent into a law that would allow the Fed to suspend leverage-​capital requirements for a limited period of time during a crisis, to be reinstated afterward.... Our proposal is no panacea, but it would be a practical improvement that ought to receive bipartisan support before crisis strikes again."

Please join us for our sixth annual ultra-​short bond fund event, Bond Fund Symposium, which will take place March 23-​24, 2023 at the Hyatt Regency in Boston. Crane'​s Bond Fund Symposium offers a concentrated and affordable educational experience, as well as an excellent networking venue, for bond fund and fixed-​income professionals. Registrations are still being accepted ($​1,​000) and sponsorship opportunities are still available. See the latest agenda here and we review the latest details below. Portfolio managers, analysts, investors, issuers, service providers, and anyone interested in expanding their knowledge of bond funds and fixed-​income investing will benefit from our comprehensive program. (Clients and friends are welcome to stop by the BFS Cocktail Party on 3/​23 from 5-​7pm too! RSVP to Natielli or contact us for more details.) We'​d like to thank our sponsors -- Northern Trust, GLMX, J.​P. Morgan Asset Management, Morgan Stanley Investment Management, Allspring Global, Fidelity Investments, J.​P. Morgan Securities, Fitch Ratings, Northcross Capital, Invesco and Dreyfus -- for their support. E-​mail us for more details. Also, we'​re starting preparations for our "big show," Money Fund Symposium, which will be held June 21-​23, 2023, at the Hyatt Regency in Atlanta. The latest agenda for the largest gathering of money market fund managers and cash investors in the world is now available and registrations are being taken. Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. (​Let us know if you'​d like details on speaking or sponsoring.) Finally, mark your calendars for our next European Money Fund Symposium, which will be held Sept. 25-​26, 2023, in Edinburgh, Scotland. Watch for details on these shows in coming weeks and months.

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (​with data as of Feb. 24) includes Holdings information from 61 money funds (​up 19 from a week ago), which totals $​1.​724 trillion (​up from $​1.​053 trillion) of the $​5.​213 trillion in total money fund assets (​or 33.​1%) tracked by Crane Data. (​Our Weekly MFPH are e-​mail only and aren'​t available on the website. See our latest Monthly Money Fund Portfolio Holdings here.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (​Repo) totaling $​1.​017 trillion (​up from $​641.​8 billion a week ago), or 59.​0%; Treasuries totaling $​391.​3 billion (​up from $​268.​7 billion a week ago), or 22.​7%, and Government Agency securities totaling $​147.​0 billion (​up from $​88.​1 billion), or 8.​5%. Commercial Paper (​CP) totaled $​69.​3 billion (​up from a week ago at $​26.​1 billion), or 4.​0%. Certificates of Deposit (​CDs) totaled $​27.​7 billion (​up from $​6.​6 billion a week ago), or 1.​6%. The Other category accounted for $​52.​5 billion or 3.​0%, while VRDNs accounted for $​20.​0 billion, or 1.​2%. The Ten Largest Issuers in our Weekly Holdings product include: the Federal Reserve Bank of New York with $​654.​9 billion (​38.​0%), the US Treasury with $​391.​3 billion (​22.​7% of total holdings), Federal Home Loan Bank with $​90.​7B (​5.​3%), Fixed Income Clearing Corp with $​82.​0B (​4.​8%), Federal Farm Credit Bank with $​52.​9B (​3.​1%), RBC with $​33.​0B (​1.​9%), JP Morgan with $​32.​4B (​1.​9%), Goldman Sachs with $​22.​0B (​1.​3%), Citi with $​21.​7B (​1.​3%) and Mitsubishi UFJ Financial Group Inc with $​20.​4B (​1.​2%). The Ten Largest Funds tracked in our latest Weekly include: Fidelity Inv MM: Govt Port ($​142.​4B), Federated Hermes Govt ObI ($​135.​0B), Dreyfus Govt Cash Mgmt ($​130.​6B), Morgan Stanley Inst Liq Govt ($​121.​2B), Fidelity Inv MM: MM Port ($​100.​3B), Invesco Govt & Agency ($​94.​6B), Allspring Govt MM ($​87.​5B), State Street Inst US Govt ($​71.​4B), First American Govt Oblg ($​69.​1B) and Federated Hermes Treasury ObIig ($​54.​3B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

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