WASHINGTON (Reuters) - U.S. senators on Thursday expressed skepticism about the need for further reforms to the $2.6 trillion money market fund industry, urging the Securities and Exchange Commission to first closely study the costs and other potential downsides.
SEC Chairman Mary Schapiro has been advocating that further steps be taken to stop potential problems at money funds from spreading throughout the financial system.
A money market fund is a type of mutual fund that is required to invest in low-risk securities.
While money market funds are generally considered safer than other mutual funds that pay dividends, they are not federally insured, which critics believe can cause a false sense of security.
Confidence in the money fund industry was shaken in 2008 when the Reserve Primary Fund, one of the oldest and biggest money funds, broke the buck, or its per-share value fell below $1. That happened because of the fund's heavy losses on debt holdings in
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