Research: The Future of Money Market Fund Regulation

This is a follow-up to my previous article, A Collateral Proposal, in which I suggested that MMFs be consolidated with the sponsors’ books for capital calculation purposes.

Recent proposals go farther than that, largely due to the effect of the Reserve Primary buck-breaking and its global ramifications. Look for the research link!

Links to source documents are available in the draft version.

6 Responses to “Research: The Future of Money Market Fund Regulation”

  1. […] I have argued that the Volcker proposals for MMF regulation be implemented. Nothing will ever guarantee that commercial paper won’t default; the only thing that will seriously affect the incidence of buck-breaking is a formalization of the current nod-and-wink guarantee by the sponsor; it will then require a double-default to break the buck. […]

  2. […] have long advocated the consolidation of Money Market Funds into the balance sheets of their sponsoring institutions, […]

  3. […] I am very pleased to see Paul Volcker on the list of participants. It was his discussion of the issue and plan for regulation that got me interested in the subject, which I subsequently addressed in an article. […]

  4. […] are many items of interest in this excellent report; one issue that I find interesting is the regulation of money market funds: The stable, rounded $1 NAV fosters an expectation that MMF […]

  5. […] SEC Chairman Mary L. Schapiro used her Remarks at SIFMA’s 2011 Annual Meeting to discuss Money Market Fund reform, a topic which I consider very important for financial stability. […]

  6. […] is credit quality – and these rules do absolutely nothing to improve credit quality, which requires mandatory support from the sponsor. But why would a regulator worry about what might actually […]

Leave a Reply

You must be logged in to post a comment.