Managers of money market funds are deeply divided as to whether the coast is clear to venture back into asset-backed commercial paper – a move that may be necessary to help end the global credit squeeze and unglue frozen mortgage markets.

Money market funds were heavy buyers of ABCP and paper issued by banks’ off-balance sheet conduits and structured investment vehicles, helping fund the excesses in credit markets prior to last summer’s blow-up.

But the funds, which hold some $4,000bn (£2,028bn, €2,590bn) of assets, have shied away from these markets since then as they have ratcheted down risk. And their absence from the market is increasingly being seen as the reason why inter-bank lending rates have remained well above overnight rates despite massive intervention by central banks on both sides of the Atlantic.

Eventually, they will. Money never sits idle for extended periods. Obviously confidence is low, and this will certainly drive the flow to the highest quality credits. But, as time passes, assuming no disasters, gradually money will again start flowing to the lower credits, and so the cycle turns once again the full circle.