Yes, really. The Treasury guaranteed dollar-for-dollar redemptions for all investors’ holdings at the time the RPF broke the buck, following Lehman’s failure several days before [0, 1]. Only those who speculated on the value of the fund after that time lost money, and very little.
Your second reference makes it quite clear that nobody was “made whole” by the program:
“Participating MMFs were required to have an NAV at or above $0.995 on September 19, 2008 (Department of the Treasury 2008f). Architects of the program chose this cutoff to prevent damaging runs while at the same time not curing “losses that had already been sustained (because of credit mistakes) at the few funds that were already in trouble” (Shafran 2020).”
“There were no losses, and the Department of the Treasury did not make any payments through the Guarantee Program, generating a surplus of $1.2 billion in fees.”
You’re right, sorry. Reserve Primary was the only fund whose NAV was below the Treasury’s qualifying threshold, so it did not participate in the guarantee program. I had the mistaken recollection that Reserve Primary’s NAV had returned above the $0.995 level by the 19th, but that was not the case.
(In fact, the SEC ended up suing Reserve Primary’s managers for making misleading statements after breaking the buck that they would restore a $1 NAV, which they did not do. Reserve Primary’s investors had an eventual recovery as of 2011 of 99.06% of par value.)
Of the funds that participated in the Treasury’s guarantee program, none were liquidated likely because the program succeeded in stemming the run on the money-market sector. As I’m sure you know, the whole point of the Treasury’s guarantee was to give money-market investors confidence that their money was safe so that they would not redeem their shares and the funds would not need to liquidate assets for payouts.
It worked, and I think it’s clear that the Treasury’s backstop, by ending the run, prevented fire-sales that likely would have led to the liquidation of further funds in the absence of government intervention. That was the point I was making in my original comment: despite the lack of a formal equivalent of deposit insurance for money-market funds, the government did step in to backstop investor’s money in the sector during the only episode in which there was a need for it.
Edit: Whoops, also noticed that in my original comment above, I twice mis-wrote money-market account. Everything we’ve been discussing relates to money-market funds (more formally, money-market mutual funds), not money-market accounts. The latter term is another name for savings accounts at a bank, which of course are FDIC-insured. (The two are related in that the cash put into both gets invested in short-term, low-risk government and commercial bonds, the markets for which are collectively called “money markets”.)
0. https://home.treasury.gov/news/press-releases/hp1161
1. https://elischolar.library.yale.edu/cgi/viewcontent.cgi?arti...