LyrArc Article Gist
The changes needed in 2008 for money market funds to provide stability in a crisis situation were not made resulting in the Federal Reserve having to step in again to support money market funds. The Fed setup a new lending facility to support these funds that are offered to retail investors at $1 a share without price fluctuations, and are used as an alternative to savings accounts by individual investors. Former FDIC head Sheila Bair says it is frustrating that we never really fixed this stuff and industry lobbyists did'nt let this happen.

These funds are a key short term financing source for many companies including banks. The funds buy the short term commercial paper that company issuers use to finance day to day needs. 

One of the changes made in 2008 was that money market funds could charge a redemption fee if there was a huge surge in withdrawals in a market panic leading to their holdings of cash or market equivalents falling below 30% of their portfolio. The SEC also let the funds suspend redemptions in that situation. The result of this is that there were large withdrawals from prime money market funds this week after the coronavirus impact on the economy increased, resulting in 11% drop in assets of prime funds to $546 billion.