ABA Letter to FSB on MMF Reforms
A news brief entitled, "ABA Tells Financial Stability Board to Take a Balanced Approach to Money Market Fund Reforms," comments, "ABA today told the Financial Stability Board that additional regulation for the banking sector to address concerns regarding money market funds would be inappropriate and unnecessary, as banks have been a source of financial strength throughout the COVID-19 pandemic. ABA added that it appreciates that the FSB is focused on the feasible reforms to money market funds -- which experienced market disruption during the early days of the pandemic -- but that reforms 'should balance the need for stability with preservation of prime and tax-exempt municipal MMFs.'" The post continues, "ABA also urged FSB to remove the tie between the weekly liquid asset threshold and the imposition of fees and gates, while also potentially increasing the weekly liquid asset threshold during normal times and lowering it during times of stress. Doing so would 'balance the need for increased stability as well as the viability of these funds for the investing public,' ABA said." See the full "Letter to FSB on the Policy Proposals to Enhance Money Market Fund Resilience" here," see the FSB's "Policy proposals to enhance money market fund resilience: Consultation Report" here, and see the FSB's "Virtual workshop on policy proposals to enhance money market fund resilience" here. Responses to the FSB were due August 16, so watch for more excerpts from postings in coming days.
