Two Goldman Sachs money-market funds, hit in March by billions of dollar investor withdrawals, have steadily gained liquidity cushion, much larger than the rivals, according to Reuters. The weekly liquidity rose to 85% of total assets this week, double the level in March when Goldman injected almost $2 billion of the bank’s own capital to prevent falling below the regulatory weekly liquidity threshold of 30%.
- Prime institutional money-market funds have the discretion to block redemptions or impose fees when weekly liquidity falls below 30%, and investors see the threshold as an area of concern.
- Money-market funds, a $4.35 trillion-value industry, are bracing for the outcome of the U.S. election and global surge in coronavirus cases.
- Money-market funds are vulnerable to massive withdrawals by clients who need cash to meet their own obligations, despite regulatory efforts to make them resilient in times of crisis.
- Average weekly liquidity of approximately 111 U.S. prime institutional money-market funds, like Goldman Sachs, was 66% at the end of September, up from 54% a year-ago period.
Goldman Sachs stock is declining with the market. GS: NYSE is down 1.19%
