On 11 May 2026, the European Commission (Commission) issued a report on money market funds (MMFs) together with FAQs.
Report
In 2023, the Commission published a report showing that “the MMF Regulation successfully passed the test of liquidity stress experienced by MMFs during the COVID-19 related market turmoil of March 2020, the recent interest rate increases, and related financial asset re pricing.” Whilst the report concluded that the framework has been broadly able to ensure the sector’s resilience, it highlighted certain aspects of liquidity risk management that needed further assessment to ensure that MMFs are resilient.
The report now published follows up on the 2023 report and assesses the functioning of MMFs based on extensive analytical work and draws on multiple data sources and consultations to examine how liquidity risks are managed. It assesses how MMFs respond to liquidity shocks and how managers mitigate liquidity risk, particularly through liquidity buffers. It presents key findings on the assessment of MMF liquidity management and an analysis of appropriate market resilience levels. The annexes provide a more in-depth technical analysis of these topics.
FAQs
The FAQs provide guidance on MMFs’ minimum liquidity levels and on how liquidity buffers may be used, particularly to meet rising redemption requests during times of market stress.