rec_4

(4) Large redemption requests could force MMFs to sell some of their investment assets in a declining market, potentially fuelling a liquidity crisis. In those circumstances, money market issuers can face severe funding difficulties if the markets for commercial paper and other money market instruments dry up. That in turn could lead to contagion within the short-term funding market and result in direct and major difficulties in the financing of financial institutions, corporations and governments, and thus the economy.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-30 · Text as adopted (Official Journal); later amendments are not incorporated in this text.