The American Bankers Association (ABA) submitted a comment letter to the FSOC opposing the imposition of a floating NAV. They write, "ABA offers the following general comments on the Council's proposed recommendations: First, there is very strong support for retaining a stable net asset value (NAV) MMF, as this product is preferred by trust departments and corporate trustees as a timely and economical way to invest short-term customer cash. Second, any regulatory action must avoid creating the perception that investments in MMFs are equivalent to insured bank deposit accounts in terms of federal supervision or backing. Third, the Council should carefully consider the sufficiency of the SEC's 2010 reforms and give them adequate weight, as many bankers are convinced that further reforms are not needed. In their examination of this issue, policymakers should carefully evaluate issues regarding the liquidity and credit quality of MMF portfolios, noting the differences between federal government instruments and those that are not backed by the full faith and credit of the federal government.... As with medicine, the first rule of the regulatory practitioner is to do no harm. We believe that of the three options for additional regulation offered by the FSOC for public comment, the least risk of damaging the value of MMFs to investors -- working from the foundation of a continued stable NAV regime -- is to be found in regulatory consideration of reforms involving questions of capital to support potential losses, adequate liquidity, prudent diversification, and useful disclosures.... In conclusion, ABA strongly supports the continued use of a stable NAV. To eliminate this critical feature of MMFs would severely undermine the usefulness of the product to bank trust departments and corporate trustees, as well as to other bank investors."

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
March December December
February November November
January October October
September September
August August
July July
June June
May May
April April
March March
February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September