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The presidents of all 12 Fed regional banks pen a letter backing a regulatory push for...

The presidents of all 12 Fed regional banks pen a letter backing a regulatory push for money-market reform. "Money market funds have no capacity to absorb losses in the event of a decrease in the value of (held) assets." MINT, BIL, SHV, and GSY see a few more dollar inflows.
Comments (2)
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    This is a ploy to drive MMF holders out of these funds and into riskier assets. While a capital buffer fund is a good idea, a forced floating NAV is not, as it would just render these funds short-term bond funds. This is a red herring gov't intervention into an industry that has had few problems, other than one fund (the Reserve) that was poorly managed with holding in toxic Lehman paper and SIVs. These funds have far reduced duration risk in the past few years. No doubt holding cash is risky, with forced ZIRP and devaluation, but the value in having a place to park cash with no degradation of principal has demand.

     

    Here's the correct Bloomberg link: http://bloom.bg/Y7efOH.

     

    Here's a link to the Fed7 letter to FSOB: http://bit.ly/YaDPUT.
    12 Feb 2013, 03:00 PM Reply Like
  • WMARKW
    , contributor
    Comments (10219) | Send Message
     
    Great observation Whitehawk. I personally object strenuously to my wife's company's fund managers (401k) that they have no place to park money when going to cash or when changing from one investment to another.
    12 Feb 2013, 03:04 PM Reply Like
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