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“2020’s ‘dash for cash’ shows post-2008 reforms left a dangerous gap in our exposure to the risk of financial instability,” Bank of England (BoE) Governor Andrew Bailey said on Wednesday.

Additional takeaways

“We need to structure money market funds consistent with their role.”

“Money market funds as currently structured may often be perceived as cash-like  but cannot make good on this expectation in a sufficiently wide range of market conditions.”

“Redemption terms should be aligned with the underlying liquidity of assets.”

Market reaction

The GBP/USD pair showed no immediate reaction to these comments and was last seen losing 0.23% on a daily basis at 1.4110.

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