The Reserve fund announced last night that it was paying out 50% on investor accounts, with whatever balance remains when they can liquidate the rest of their assets.  This makes sense; the terms on their assets are short, and it's probably better for everyone to hold to maturity than to dump on the market at fire sale prices.

The question remains:  why didn't they say so?  The fund has handled its communications with investors and the press abominably, as Evan Cooper points out.  People who use the money for short term purposes should, at the very least, be informed when they might get their cash to pay off the loans they've had to take out.  And it certainly doesn't do the firm any good to have the press repeatedly print, as it has, "the company was unavailable for comment".  When uncertainty is feeding a raging liquidity crisis, you don't add to it by conducting all your investor and press relations through your website.

We want to hear what you think about this article. Submit a letter to the editor or write to