ICI's Paul Schott Stevens writes in "The Volcker Illusion: Why Bank Regulation Won't Work for Money Market Funds," "Today I submitted the following letter to the editor of the New York Times: Paul A. Volcker opposed the development of money market funds during his days as chairman of the Federal Reserve, and 30 years later he maintains his campaign of misinformation against these funds. His comments to Gretchen Morgenson ("How Mr. Volcker Would Fix It," October 22) represent another attempt to use the financial crisis -- a crisis rooted in banks and banking regulation—to deprive the economy of the enormous benefits that these funds bring investors, businesses, and governments.... Mr. Volcker's solution -- imposing bank-style regulation -- would wreak enormous damage by destroying money market funds without solving any problems. After all, the track record of banking regulation was exposed by Mr. Volcker himself, in a remark at the Securities and Exchange Commission's roundtable on money market funds this past May. Told that the U.S. had approximately 650 money market funds, Mr. Volcker said they should all be converted to banks. "This country could use 650 more banks," he said. "We just lost about 1,000 during the crisis."
