A release entitled, "Fitch: Bank Credit Quality & European MMF Regulations Concern Treasurers," says, "European corporate treasurers are concerned by decreasing bank credit quality, global banking and European money market fund (​MMF) regulation, according to a live survey of 90 delegates at Fitch Ratings' third annual cash management conference in London last week. The event was hosted by Fitch'​s Fund and Asset Manager Rating group. The survey highlights the challenges faced by short-​term investors, who are confronted with Basel III regulation that is reducing banks' appetite for short term funding and a potential overhaul of European MMF regulation: --​70% of delegates view daily liquidity and cash flow matching as primary objectives of short-​term investors. This objective came well ahead of achieving yield, which 17% listed as a primary objective. --Almost two-​thirds of delegates consider the VNAV vs. CNAV issue as the most important matter in the proposed European MMF regulation. UK investors, who were more strongly represented in the audience, are more sensitive about this question than other European investors. --​Three-​quarters of delegates think that their allocation to MMFs would decrease if the majority of MMFs were to move to VNAV as a consequence of the proposed regulation. As a result, they would expect to reallocate cash away from MMFs into bank deposits and direct investments in short-​term instruments. --​40% of delegates stated that changes in bank credit quality are treasurers' biggest challenge with Basle III and MMF regulations cited equally as the second biggest challenge. --​80% of delegates said that MMF ratings are explicitly mentioned in their investment guidelines. They value MMF ratings for providing inputs in their risk analysis (​49%) and an assessment of the manager/​investment process (​28%)."

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