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The key to the long-held perception that money market funds are akin to savings accounts is that stable $1 “net asset value,” or N.A.V. But it wasn’t always that way. When money market funds were first created in the early 1970s, they had a “floating” N.A.V., just like any other kind of mutual fund.

On the day a fund opened, it would be set at $10 a share. Investors would get the numbers of shares that equaled their investment. The fund manager tried to maintain that price, but it would often fluctuate between, say, $9.97 and $10.03. “Most days, though, it stayed at $10,” recalled Matthew P. Fink, the former president of the Investment Company Institute, and the author of “The Rise of Mutual Funds.” But even when it didn’t, the world didn’t come to an end.

By the time money funds became truly popular, however, they did have that fixed $1 share price. This was during the early 1980s, when interest rates had skyrocketed and money funds  unlike regulated savings accounts  offered market rates of interest. In the late 1970s, the industry had persuaded the S.E.C. to allow it to move to a stable N.A.V., which it pushed for precisely because it wanted money funds to resemble a bank account, with which they were competing. (Money funds even came with checks attached.) To accomplish this, a series of new regulations were required, one of which exempted money funds from mark-to-market accounting, while others imposed limits on the kinds of short-term securities they could hold.

I’ve always believed that the invention of money market funds was the secret key to the rise of the mutual fund industry. People flocked to them in the early 1980s because they were the only tool available to prevent middle-class savings from being eroded by inflation. Then, when the bull market began in 1982, Americans gradually moved that money into mutual funds.

But money market funds didn’t fade away, even after bank savings accounts were deregulated. Throughout their history, they offered higher yields than people could get at the bank, and even though they lacked government insurance, people used them the same way they used a bank account: as a place to park cash. The industry became so committed to the idea that money funds should serve as alternatives to bank accounts that on the rare occasions when a money fund threatened to break the buck  that is, lose a penny or two  the company that owned the fund invariably put up the cash to prevent any losses.

When the Reserve Fund broke the buck last year, it was only the second time that had ever happened. (The first time involved a much smaller fund, and had much less impact.) The industry, having built the business on the foundation of the $1 share price, reacted in horror.

But when you think about it, the Reserve Fund didn’t really “collapse.” Rather, one of its securities defaulted and it lost a few pennies for its investors. It happens. The problem is that the fund industry has spent so many years training people to believe this could never happen, that they inevitably panicked when it did. And that panic, in turn, is what caused the government to rush to the rescue with its guarantees.