This is not the case, however, because a substantial part of CP and CDs issued by non-U.S. banks used to be purchased by "prime" MMFs, and their issue had to be compressed considerably, following the U.S. MMF reform, which came into effect last October (Chart 6).
The reform, introduced under new U.S. SEC rules, requires the adoption of floating net asset value (NAV) and imposition of redemption fees, and opens the possibility of restricting redemption. This prompted a huge shift in funds from prime MMFs to "government" MMFs, which invest mostly in U.S. government securities and are exempt from the new rules.