Morgan Stanley clients forced the firm to buy $23 billion of securities held by the funds after withdrawing almost one-third of their cash from money-market accounts last month, Bloomberg News reports.
Redemptions were $46 billion in September, mostly from funds that invest in corporate debt, Morgan Stanley said in a regulatory filing. The New York-based company made sure the money-market funds had enough cash to repay investors by acquiring some of their assets with financing from “various available stabilization facilities.”
Morgan Stanley may have relied on one or more programs set up by the Federal Reserve in the past month to prop up the $3.54 trillion money-market fund industry, analysts said. The Fed has taken steps to restore investor confidence shattered by losses last month at the Reserve Primary Fund, the oldest US money-market fund.
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