US money market funds are reportedly turning away investors as the disarray in the $4,000bn (£2,264bn, €2,907bn) global industry continues to scupper efforts to unlock frozen debt markets (PDF).

The unprecedented illiquidity in short-term bank financing and the commercial paper market has left money market funds wary of making new purchases amid fears they will suffer losses if jumpy investors redeem before the holdings mature. That in turn is adding to illiquidity and pushing up inter-bank lending rates.