The Financial Times writes "Money market reform a win for Uncle Sam". It tells us, "There is only one certain winner from regulators’ flawed attempts to deal with systemic risk in the $2.6tn US money market fund industry, and that is the US government. New rules look set to reduce short-term borrowing costs for the US Treasury, at the expense of higher interest charges for corporate borrowers, who use the commercial paper market to fund business expenses such as payrolls. Money market funds are among the biggest buyers of short-term debt, and have established themselves at the centre of the credit markets, so reforming them is proving a nerve-racking business. The best that can be said is that at least the Securities and Exchange Commission is trying. European Union politicians have punted the whole issue on to the next parliament. In the US, institutional prime money market funds, which invest in commercial paper, are set to fall under a new regime to prevent runs like the one that nearly brought down the financial system in 2008. Some proportion of the $900bn currently in such funds will shift into safer money market funds that invest only in Treasury debt which -- as a result of a messy compromise -- are being left untouched by the SEC."

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