Bingham writes "President's Working Group Evaluates Options for Money Market Fund Reform"
Law firm Bingham writes "President's Working Group Evaluates Options for Money Market Fund Reform". The brief says, "On October 21, 2010, the President's Working Group on Financial Markets released its long-awaited report on money market fund reform. The report was prepared in response to the Department of the Treasury's June 2009 request that the PWG assess the additional reforms needed to further reduce the money market fund industry's susceptibility to runs and risk to the U.S. financial system. The report states that, even though the SEC has already tightened money market fund regulation, further reform is needed. However, it does not endorse any particular approach to reform but rather provides a summary of reform options and the potential benefits and risks of each option. The PWG has requested that the newly established Financial Stability Oversight Council (FSOC) examine further the options detailed in the report. In support of this effort, the SEC will solicit public comments and empirical data on the reform proposals in the near future. [The SEC began soliciting comments late Wednesday.]" Bingham adds, "While the PWG's report argues that further money market fund reforms are necessary, its inability, after more than a year of deliberation, to make a definitive recommendation highlights the fact that further reforms would not be without cost and risks. Among those risks is the possibility that the role of money market funds as a source of credit and liquidity for our financial system may be undermined. It remains to be seen whether the FSOC, the SEC and other policy makers will conclude that the benefits of any specific reform proposal outweigh the associated costs and risks."
