Today, we continue citing comments from Tuesday's U.S. Chamber of Commerce Center for Capital Markets Competitiveness seminar in Washington, "The Money Market Mutual Fund: Why it Matters. Yesterday, we quoted extensively from Vanguard's Jack Brennan (see below), who keynoted on "Money Market Funds: Weathering the Financial Crisis." Today, we quote from the rest of the seminar, which is now available in its entirety via recorded webcast.
David Hirschmann, President and Chief Executive Officer, Center for Capital Markets Competitiveness introduced the conference and asked, "Why would the Chamber of Commerce would pick this topic?" He said for three reasons -- "Just how fundamental the money market mutual fund is to Main Street America," "The industry has shown leadership in driving reform," and "The Guarantee looks like it will end and that taxpayers made out to the tune of $1 billion. It's a successful story."
The panel on "The Role of Money Market Funds in our Economy" included Charlie Morrison, President and Money Market Group Leader of Fidelity Management and Research Co., Paula Tkac, Financial Economist and Associate Policy Adviser of the Federal Reserve Bank of Atlanta, Kenneth Froot, Professor of Business Administration at the Harvard Graduate School of Business, and Tate Reeves, State Treasurer of Mississippi.
Treasurer Reeves says, "The primary reason we use money market funds is for liquidity purposes." He noted the state's extensive use of money funds and cited the "diversification of asset classes within the money market funds" as a major benefit. Morrison said that money funds are "arguably the most popular cash management vehicle that's out there."
Tkac noted, "The centrality of the money markets to funding markets in general." She said that last fall, "The crisis in money markets was spilling over.... The flight to safety was pushing past the money markets." She also noted that, "The U.S. money market was influential enough to influence the European banks.... This was the epicenter of the financial crisis. It was important to put a floor under it to stabilize everything else."
The second panel on "The Future of Money Market Funds and Reform Enhancements," run by Paul Stevens, President and CEO of the Investment Company Institute included Buddy Donohue, Director of the Division of Investment Management at the U.S. Securities and Exchange Commission, Barry Barbash, Partner at Willkie Farr & Gallagher LLP, Randall Merk, Executive Vice President of Investment Management Services at The Charles Schwab Corp., and George Gatch, Chief Executive Officer of JP Morgan Funds Management.
Look for more commentary from this panel in coming days, including quotes from panelists on the possibility of a floating rate NAV for money funds. Or watch the full 3-hour webcast at: www.uschamber.com/webcasts/2009/090519_ccmc_moneymarketfunds.htm.
