On Tuesday, 15 financial officials will be among the only people in Washington not engaged in obsessive conversations about the fiscal cliff.

The group, from the Financial Stability Oversight Council, will be fighting a battle that, just before the presidential election, looked completely lost. Their task: to prevent money-market mutual funds from collapsing the next time we have a crisis.

It sounds like a no-brainer, doesn't it? After all, consider the alternative: who would prefer money-market funds to take down the financial system when the next Lehman comes around?

Yet, like all financial reform, it's been a hard sell in Washington. Tim Geithner, the treasury secretary, has been its champion; no use. You couldn't say that the battle was lost. It didn't even come to a real fight. Mary Schapiro, the chair of the Securities and Exchange Commission, canceled an important vote on it in August after three SEC commissioners refused to participate in reforming the money-market funds just yet.

If you thought the fiscal cliff was Washington gridlock, the fight over money-market funds would make your head spin.

At least with the fiscal cliff there are deeply held socio-economic positions on both sides about fairness and taxation and prosperity. Money-market funds are not – or at least should not be – a flashpoint. Everyone should be able to agree that money-market funds need to be safer.

If you're an average American, it's hard to see why. As boring as taxes are, money-market funds are perhaps even less riveting. Money-market mutual funds don't sound exciting – and they aren't. They hide away, unnoticed, in the 401ks of most Americans. Their chief virtue is that they're a way to park money, like a savings account, without a lot of risk to your wallet. They barely pay any interest. They have no flash, and no dazzle.

But don't be fooled by appearances. The money invested in those unassuming funds is huge – in the US alone, it adds up to $2.6tn in cash. That's about the same amount Americans spend on healthcare annually.

And, as the money would indicate, those money-market funds are also extremely powerful. They are the underpinning for nearly the whole US financial system.

Here's how money-market funds work: they take money from ordinary investors; you usually need about $1,000 to start. The funds invest that money in different kinds of securities, like bonds. As an investor in the fund, you collect some interest – not much, but more than a savings account. Money-market funds are just like other mutual funds in that way.

But, unlike mutual funds, which you know you can lose money on, money-market funds have an untouchable reputation. They are considered as safe as treasury bonds, which are the safest investment in all of America. For that reason, money-market funds turn around and use the money you invest to lend money to banks, here in the US and in Europe. The money-market funds lend money overnight, and the banks pay it back. Since banks thrive on such short-term lending, they could really not do business without money-market funds behind them.

Yet the system behind money-market failed once, at the worst possible time. Around September 2008, people who had their cash in money-market funds like the Reserve Primary Fund freaked out. They took their money out. It was like a run on a bank. The money-market funds saw their value fall beneath the strict bar of $1 a share. This was like going to your savings account and finding out the bank had taken it. The money-market funds then had to pull that money away from banks – including Lehman Brothers – which were already struggling to survive.

Financially, this debacle was like an atomic bomb going off in the middle of a war – disaster upon disaster. It was shocking to banks and regulators and the people with money in the funds themselves. The government had to run in to protect investors, banks and the funds.

Four years after the crisis, money-market funds still enjoy their completely safe reputation, but they are still the most vulnerable part of the US financial system, and the least touched by rules. The funds are barely regulated. SEC chair Schapiro said, accurately, "The risks posed by money-market funds to the financial system are part of the important unfinished business from the financial crisis of 2008."

So those regulators will gather on Tuesday to find out, and agree, about what to do about it. There are three big problems with money-market funds: they appear completely safe when they are not; investors get more money if they take out their money early in a crisis, which creates disaster for other investors who react slowly; and the funds invest in stocks and bonds that can't be sold right away, so it's hard for them to round up the ready cash to pay for big redemptions from investors.

There are a few ideas on the table.

One idea is to price money-market funds at their real value. Right now, even if a fund is worth 99.8 cents, you would still get a full $1 if you tried to pull your money out. Any time you look at your money-market fund, the value is always $1. This creates the illusion that the funds are safe, unchanging, immune to the market. That illusion is false. So one solution that Schapiro likes is to force the funds to actually write the real, current value of each share – whether it is 99.8 cents or 99.3 cents – into their accounts. This would rip away the smokescreen that the funds are perfectly safe; if investors saw the value of money-market funds fluctuating, they would realize that their money is really at risk. The money-market fund managers think that $1 is a nice round stable number and easier to keep track of in their computers.

Another idea is to impose penalties for people who try to withdraw their cash from money-market funds, which is called "gating". This would make it harder for investors to pull their money out; but at some point, no matter how bad things get, you have to give people access to their own money, so this option is the most temporary one.

And yet another idea would be to force the money-market funds to hold extra money on the side, in case people want their money back right away. This idea of having reserves is common in the banking system, but it's not common in the fund industry. Like banks, money-market funds hate having extra money lying around that they can't really put to use.

Not all of this is going to be hammered out on Tuesday; but it needs to start in earnest. Many in the US won't be paying attention to this meeting. The fiscal cliff, with its broad strokes of politics and disaster, is a much more appealing drama. But it would be a mistake to ignore money-market funds.

When the next financial disaster comes, they're the first thing we're going to start worrying about. And four years after the last crisis, there's no excuse for being unprepared.

• This article was amended on 13 November 2012 to remove the sentence asserting money-market funds are insured by the Federal Deposit Insurance Commission. Money-market funds are not backed by the FDIC. The article was further amended on 14 November to correct the description of money-market funds investing in stocks and bonds; they do not invest in stocks.