Volcker in NYT Silent on MFs
Sunday's New York Times writes "Volcker, Loud and Clear". The article contained just one small comment on money market funds and contained no indication that Paul Volcker has changing money market fund regulations high on his priority list. The Times article's only mention of money funds says, "There were other, earlier silences. Starting in the 1970s, ceilings came off the interest rates banks could place on most deposits and loans. A rising inflation rate made the ceilings impractical, and competition from unregulated money market funds was siphoning big chunks of deposits from the banks." It quotes Volcker, "The lifting of interest-rate ceilings was inevitable. I was for doing it more gradually, but it got such a momentum that we moved the limits more abruptly than I wanted to." In other news, see Reuters' "Fidelity reopens four money-market funds" (Crane Data's mention was a day earlier) and FT's "Big inflows into money market funds as double-dip fears rise", which says, "Investors have poured tens of billions of dollars this week into money market funds -- considered to be among the safest assets -- amid fears that a double-dip recession in the developed world could send financial markets tumbling. The global funds, which are seen as a proxy for cash, enjoyed their biggest weekly inflows in 18 months, absorbing $33.5bn, research group EPFR Global said yesterday." (Our figures show inflows, but we don't agree with the "largest in 18 months" statement.)
