Investment News writes "Plaze worries about money fund contagion risk". It says, "Past events plague Robert E. Plaze, deputy director of the Securities and Exchange Commission's Division of Investment Management, who fears that mistakes made by one money market fund could spread throughout the industry and cause another run on such funds." They quote Plaze, "There have been hundreds of money fund bailouts, where the funds would have broken the buck if the manager hadn't stepped in. We continue to see risks, and we're worried that another event could occur.... There's a lot of room for creative investment minds. If one fund makes a mistake, it's going to spread to the other funds." IN adds, "Mr. Plaze said that he is particularly concerned about "outliers" that are able to deliver a high yield in a low-yield world. The average yield on money market funds is just 0.02%, down from 4.7% at money market funds' peak in June 2007. Publicly traded companies that offer money market funds also are under increased pressure to generate more fees from the funds to generate more profits. Last year, firms waived $5.7 billion of money market fees, while collecting just $4.7 billion, for example."
