Exchange traded fund (ETF) investors continue to watch as the once safe money market funds face problems. SunTrust Bank (STI) is one of the latest banks to bailout their money market fund to keep it from falling below $1 a share, reports David Mildenberg for Bloomberg. SunTrust added $1.4 billion into two of its funds, making it at least the seventh company that has had to inject rescue money in an attempt to spare customers further losses.
Structured Investment Vehicles (SIVs) and the credit crunch are causing the turmoil. The 10 largest managers of money market funds held about $50 billion in SIVs as of November. Some have already defaulted, but others, such as SunTrust are putting money into the funds as a way to keep the clients confident and avoid withdrawals.
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