Barron's writes "Money-Market Compromise?" It says, "Money-market reform is in the hands of another set of regulators now, including Treasury Secretary Tim Geithner and Federal Reserve Chief Ben Bernanke. But it's Charles Schwab that's publicly changing the conversation. The debate over money-market reform has been one long, ugly slog, and it's far from over. But the conversation is changing. After the SEC failed to garner enough internal support to bring its proposal to a vote, its chairman and money-fund bogeyman, Mary Schapiro, essentially tossed the hot potato to the Financial Stability Oversight Council.... [FSOC's] proposal, announced Nov. 13, looks suspiciously like the SEC's, involving a floating net asset value and capital requirements.... The fund industry's lobbying arm, the Investment Company Institute, immediately responded that the proposal "failed to advance the debate over how to make money-market funds more resilient in the face of financial crisis" and that "ICI and its members continue to oppose these reform concepts."" It quotes, "Pete Crane, publisher of the eponymous and ubiquitous Crane Data," "Money funds feel backed into a corner. For them, this is life or death." Barron's adds, "That is, until Charles Schwab--which has $155 billion in money-fund assets and had been ardent in its opposition to any money-fund reform--publicly called for compromise. CEO Walt Bettinger put forth the firm's proposal in an op-ed piece in The Wall Street Journal.... Treating prime funds differently than government-only funds is legitimate and shouldn't be hard to implement. Distinguishing between institutional and retail money is trickier, as even Schwab acknowledges. The proposal is light on details, which has emboldened some critics to note that Schwab has very little in the way of institutional money, compared with money-fund kingpins JPMorgan, Federated, Fidelity, and others."
