The funds would have simply vaporized. The actual supply of green dollar bills in the world is about $800 billion. But money market funds are valued at $8 trillion. If everyone actually tries to redeem their shares for dollars, each share would ends up being worth pennies on the dollar.
Instead, the Fed stepped in an backed up the funds with the full faith and credit of the U.S. government. Essentially, the Fed monetized the money market funds.
Instead, the Fed stepped in an backed up the funds with the full faith and credit of the U.S. government. Essentially, the Fed monetized the money market funds.