Credit Crisis Tainting Some Money Market Funds

Some companies may not be able to repay commercial paper loans, also known as short-term IOUs, and that could hurt money market funds, which often put a great deal of money into such debt, the Los Angeles Times reports.

However, industry experts said that because money market funds are required to invest in high-quality loans, there was no need for immediate panic. Further, even if a holding in a money market fund should turn bad, it’s likely that the asset management firm would make investors whole, said Russ Kinnel, director of mutual fund research at Morningstar.