ICI's Brian Reid presented recently on "Money Market Funds: Lessons from Five-Plus Years". His speech, prepared for iMoneyNet's Money Market Expo (MMX) conference last week in Orlando, says, "[A] friend recently asked me, "What have you learned in the past five years about money market funds?" And that gave me a fresh start on this speech. I have learned more about the short-term markets and money market funds in five years than I had learned in the prior 20 years at ICI and as a staff economist at the Federal Reserve Board. I have also learned that some policy proposals can be far more complex than what they seem on paper. But the most important lessons for me have been not been about the economics of the markets and funds -- but about the regulatory process. Five years ago, I thought that was a simple four-step process: Potential regulatory issues are identified by the industry or regulators; Regulators propose reforms; Then, various constituencies provide comments and present data and arguments in favor or against the proposals. Finally, the regulator uses those comments to arrive at rules that it believes will achieve its public policy goal. What I have come to learn is that this textbook explanation doesn't capture several important factors in the policy process. So this morning I want to fill in the blanks and discuss three key elements about policymaking that I have learned firsthand over the past five years."

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