Another Comment Letter in response to the Financial Stability Oversight Council's Proposed Money Market Reforms comes from Treasury Strategies. It says, "We are writing in response to the Financial Stability Oversight Council's recommendations on money market mutual fund ("MMF") reform, "Proposed Recommendations Regarding Money Market Mutual Fund Reform". Treasury Strategies, Inc. has prepared detailed opinions on each of the three alternatives and submitted them under separate cover to the Council. In them, we present evidence to discourage regulators from pursuing flawed and potentially devastating regulation. We appreciate the opportunity, as the leading corporate treasury and liquidity management consulting firm, to participate in this process and sincerely hope that you refrain from any actions that impair the deepest, broadest, most efficient and most transparent capital markets in the world. Treasury Strategies believes this entire process is seriously flawed. Many statements in your Proposal background purported to be "facts" are not facts at all. Rather, they are unfounded assertions that have been repeated so often by senior officials they have now become lore. But, we repeat, they are not facts. For four years, the regulatory process has been highly and publicly focused on placing new constraints and requirements on MMFs. Your Proposal asserts this is because MMFs were a pernicious source of trouble during the 2008-2009 financial crisis, and need to be reined and tamed so that does not happen again. We disagree.... [S]hould events similar to the precipitating events of the financial crisis ever be repeated, investors will still behave the same way. They will panic. They will run from every non-insured financial instrument, again. Period. That's the human emotion, not a financial decision. No amount of regulation will ever change that.... MMFs withstood the unprecedented events of the financial crisis remarkably well."
