Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Nov. 1) includes Holdings information from 47 money funds (down 26 from a week ago), or $2.801 trillion (down from $3.786 trillion) of the $6.870 trillion in total money fund assets (or 40.8%) tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our Oct. 10 News, "October Money Fund Portfolio Holdings: Repo Surges, Reclaims Top Spot.")
Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.310 trillion (down from $1.709 trillion a week ago), or 46.8%; Repurchase Agreements (Repo) totaling $963.0 billion (down from $1.369 trillion a week ago), or 34.4%, and Government Agency securities totaling $276.6 billion (down from $348.5 billion), or 9.9%. Commercial Paper (CP) totaled $97.3 billion (down from a week ago at $139.9 billion), or 3.5%. Certificates of Deposit (CDs) totaled $58.6 billion (down from $79.5 billion a week ago), or 2.1%. The Other category accounted for $63.5 billion or 2.3%, while VRDNs accounted for $31.7 billion, or 1.1%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.310 trillion (46.8% of total holdings), Fixed Income Clearing Corp with $257.3B (9.2%), the Federal Home Loan Bank with $193.5 billion (6.9%), BNP Paribas with $73.3B (2.6%), JP Morgan with $68.4B (2.4%), Citi with $65.3B (2.3%), Federal Farm Credit Bank with $58.4B (2.1%), Goldman Sachs with $49.1B (1.8%), the Federal Reserve Bank of New York with $47.4B (1.7%) and RBC with $44.7B (1.6%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($284.5B), Goldman Sachs FS Govt ($252.3B), JPMorgan 100% US Treas MMkt ($215.8B), Fidelity Inv MM: Govt Port ($214.4B), State Street Inst US Govt ($174.5B), Morgan Stanley Inst Liq Govt ($141.5B), Fidelity Inv MM: MM Port ($140.7B), Dreyfus Govt Cash Mgmt ($132.1B), Allspring Govt MM ($120.5B), and First American Govt Oblg ($100.6B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
In other news, Norton Rose Fulbright's Steven Lofchie writes that the "FDIC Chair Considers Deposit Insurance Reforms" in the latest "US Regulatory Intelligence." He tells us, "FDIC Chair Martin J. Gruenberg considered US and European experiences with deposit insurance and potential reforms to strengthen financial stability. In remarks at the Center for Financial Studies at Goethe University Frankfurt, Mr. Gruenberg highlighted the risks posed by heavy reliance on uninsured deposits, which, he said, contributed to the destabilizing bank runs in 2023."
The brief tells us, "He described the FDIC's ongoing review of deposit insurance coverage levels and-noting the trade-offs-identified three potential reforms being considered to address financial stability concerns: (i) raising the standard coverage limit, (ii) providing unlimited coverage and (iii) implementing targeted increased coverage for specific account types. Mr. Gruenberg indicated that the FDIC is particularly interested in higher coverage for business accounts, which could mitigate the risk of bank runs triggered by operational funding needs."
It says, "He recognized and cautioned against broad expansions that could introduce moral hazard. He reported that the FDIC and other regulatory agencies were developing a rule that would require large regional banks to issue long-term debt."
The piece also explains, "Mr. Gruenberg acknowledged regulatory efforts in the European Union to strengthen their deposit insurance framework and provided insights from the US experience with the FDIC's centralized system. While distinguishing the two systems, he supported European efforts, post the 2008 Global Financial Crisis, toward establishing a framework for ensuring financial stability, which include three integrally related pillars: (i) a single system for supervision, (ii) a single system for resolution and (iii) a single system for deposit insurance. He said 'I ... hope that the European Banking Union's aspirational third pillar may become a reality in the years ahead.'"
Gruenberg says in the speech, "The Deposit Guarantee Schemes Directive, as amended in 2014, requires each EU Member State to ensure that at least one deposit guarantee scheme is established in their jurisdiction.... The 2014 Directive also sets minimum requirements for deposit guarantee schemes and the protections available to depositors. Those enhancements were several-fold. It set the harmonized coverage level at EUR 100,000 (or equivalent for EU Member States outside the Eurozone)."
He comments, "The failures of three large U.S. regional banks in early 2023 brought to bear a risk about which the FDIC had been concerned for many years.... We have clear evidence now, based on the 2023 experience and the failures of Silicon Valley Bank (Silicon Valley), Signature Bank (Signature), and First Republic Bank (First Republic), that the heavy reliance of those banks on uninsured deposits for funding created a destabilizing contagion effect on other banks. The runs materialized after we announced that the failure of Silicon Valley Bank would result in losses to uninsured depositors."
Gruenberg continues, "While the FDIC resolved all three failed institutions last year in a manner that mitigated systemic risk, that outcome was by no means certain. In particular, the resolution of Silicon Valley and Signature required the use of extraordinary authority by the FDIC, the Federal Reserve, and the Treasury -- the systemic risk exception under the Federal Deposit Insurance Act -- to protect uninsured depositors at those institutions, setting aside the least cost requirement to the Deposit Insurance Fund."
He states, "The spring of 2023 highlighted the risks of heavy reliance on uninsured deposits and raised questions about the purpose and design of the deposit insurance system. In response to last year's bank failures and the issues they raised, the FDIC published a report that covered the role and history of deposit insurance and offered three main options for reform of the system. The first is to raise the level of deposit insurance coverage.... A second option would be to provide unlimited coverage.... The third option would be targeted increased coverage for different types of accounts."
Finally, the FDIC Chair adds, "In particular, it would focus on higher coverage levels for business payment accounts. Business payment accounts may pose a lower risk of moral hazard. Holders of accounts for operational business purposes are less likely to view their deposits using a risk-return tradeoff than a depositor using the account for savings and investment purposes. At the same time, business payment accounts may pose greater financial stability concerns than other accounts given that the inability to access those accounts can result in broader economic effects resulting from failure to make payrolls."
