US dollar money market funds and non-US banks

BIS Quarterly Review  |  March 2009  | 
02 March 2009
by Naohiko Baba, Robert N McCauley and Srichander Ramaswamy
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  |  17 pages

The Lehman Brothers failure stressed global interbank and foreign exchange markets because it led to a run on money market funds, the largest suppliers of dollar funding to non-US banks. Policy stopped the run and replaced private with public funding.

JEL classification: E58, F34, G28, G29.

Includes box: Money market funds