Overhaul of money funds spurs shake-up of dollar financing

New York

REGULATORS' effort to stamp out risk in the United States' US$2.6 trillion money-fund industry is creating unintended ripple effects across financial markets, with far-reaching consequences for companies and investors.

Far less cash than anticipated has returned to the higher-yielding slice of the money-fund world, after the overhaul that took effect in October led to a US$1 trillion exodus from what are known as prime funds.