Journal Mentions European Reforms
This weekend's Wall Street Journal wrote, "U.S. Money Fund Reforms Come to Europe -- Will Volatility Follow?" The article said, "The European Union is set to impose restrictions on money funds, in a move that follows increased U.S. regulation that led to massive outflows from some funds there. Last week, the Council of the EU, a body representing the bloc’s governments, approved rules on locally domiciled money-market funds that will impose stricter liquidity requirements and limit redemptions, among other measures. Investors expect the new regulation to take effect in 2018 or 2019. The U.S. has already tightened its regulation of money funds, which invest in short-dated debt and are central to how banks, leveraged investors and companies both raise money and store their own cash…. Market participants say it's hard to predict what effects the new regulations will have on European money-market funds, which local banks use to finance 40% of their short-term financing needs. However, they expect less turmoil than after the U.S. changes." The piece quotes ` Fitch Ratings' <i:http://www.fitchratings.com>`_ Charlotte Quiniou, “There is a lot of uncertainty about how investors will react going forward." It adds, "The money-market fund industry manages roughly $2.7 trillion in the U.S. and E1.1 trillion ($1.15 trillion) in the Eurozone, according to the Investment Company Institute and the European Central Bank." (For more, see Crane Data's Nov. 17 News, "Europe Agrees to Money Fund Reforms: VNAVs, CNAVs and New LVNAVs," our June 16 News, "European Money Fund Reform Deal Poised to Pass; CNAVs to Be LVNAVs," our April 16 News, "European Compromise Moves MMF Reforms Closer; Sterling MFs Jump," and our March 2 News, "IMMFA on European Reforms; MFI Intl Review; European MF Symposium.")
