ICI's latest weekly "Money Market Fund Assets" report shows money fund assets hitting a record $4.814 trillion, breaking their previous record high of $4.789 trillion (made on May 20, 2020). Money funds showed their biggest weekly increase since April 29, 2020, and they've risen in 8 of the past 10 weeks, jumping by $229.3 billion, or 5.0%, since October 26. Over the past 52 weeks, money fund assets are up by $111 billion, or 2.4%, with Retail MMFs rising by $253 billion (17.2%) and Inst MMFs falling by $124 billion (-3.8%). ICI shows assets up by $79 billion, or 1.7%, year-to-date in 2023 (the first week), with Institutional MMFs up $35 billion, or 1.2% and Retail MMFs up $43 billion, or 2.6%. (See yesterday's Crane Data News, "Money Fund Assets Hit Record $5.23 Trillion; Weekly Holds; Fed Minutes.")
The weekly release says, "Total money market fund assets increased by $78.61 billion to $4.81 trillion for the week ended Wednesday, January 4, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $54.46 billion and prime funds increased by $18.81 billion. Tax-exempt money market funds increased by $5.34 billion." ICI's stats show Institutional MMFs rising $35.4 billion and Retail MMFs increasing $43.3 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.019 trillion (83.5% of all money funds), while Total Prime MMFs were $678.3 billion (14.1%). Tax Exempt MMFs totaled $115.9 billion (2.4%).
ICI explains, "Assets of retail money market funds increased by $43.25 billion to $1.72 trillion. Among retail funds, government money market fund assets increased by $24.00 billion to $1.19 trillion, prime money market fund assets increased by $15.06 billion to $428.85 billion, and tax-exempt fund assets increased by $4.19 billion to $103.42 billion." Retail assets account for over a third of total assets, or 35.8%, and Government Retail assets make up 69.1% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $35.35 billion to $3.09 trillion. Among institutional funds, government money market fund assets increased by $30.47 billion to $2.83 trillion, prime money market fund assets increased by $3.75 billion to $249.48 billion, and tax-exempt fund assets increased by $1.14 billion to $12.43 billion." Institutional assets accounted for 64.2% of all MMF assets, with Government Institutional assets making up 91.5% of all Institutional MMF totals.
As we wrote yesterday, money market mutual fund assets jumped to record levels on the first business day of 2023, according to our Money Fund Intelligence Daily. Crane Data shows total money fund assets rose by $34.2 billion on Tuesday (1/3/23) to an all-time high of $5.225 trillion, breaking previous record highs from early December 2022 and May 2020. Assets increased by $78.7 billion in December and by $58.3 billion in November, according to MFI Daily. (Assets increased another $4.1 billion on Wednesday, 1/4/23.) Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.)
In other news, a press release entitled, "Office of Financial Research Releases Proposal to Collect Data on Certain Repo Transactions," tells us, "The Office of Financial Research ... proposed a rule to improve transparency in the U.S. repurchase agreement market. The Office proposed collecting daily transaction level data from certain financial companies on their non-centrally cleared bilateral repurchase agreement trades." (See the full proposal here.)
James Martin, OFR's Deputy Director of Operations, comments, "This initiative to provide better visibility into this opaque financial market segment is vital to helping ensure financial stability. When significant stress on U.S. Treasuries spilled into the repo market in March 2020, regulators didn't have full insight into the segment of the repo market where participants were most active, namely the non-centrally cleared bilateral segment. This was due, in part, to the lack of data reported to officials on these transactions."
He adds, "The OFR is proposing to fill this data gap, and provide regulators with more insight into Treasury market functioning, by requiring the largest institutions in the repo market to submit data on their non-centrally cleared bilateral transactions to the OFR each day."
The release explains, "Repurchase agreements are critical to the U.S. financial system's securities and money markets. High-quality data are essential to assess and monitor risks in these markets, but historically little data has been available to regulators on bilateral repo activities. The OFR closed part of this data gap in 2019 by beginning to collect data on centrally cleared transactions and has now turned its attention to the non-centrally cleared bilateral repo market. `This segment of the repo market -- where repo transactions are conducted between two firms without a central counterparty or tri-party custodian -- is a blind spot for regulators and is also the largest of the four repo market segments."
It tells us, "The Financial Stability Oversight Council, among others, recommended that the OFR consider ways to obtain better data on the non-centrally cleared bilateral repurchase agreement market, an important source of leverage for hedge funds. After extensive discussions with market participants and consultations with the Council, as well as a pilot data collection initiative, the OFR chose to move forward with a permanent data collection."
The release states, "Specifically, the OFR proposed that firms submit daily trade and collateral information on all outstanding non-centrally cleared bilateral repurchase agreement transactions. The OFR proposed that covered firms submit 33 data elements each day for all transactions, such as haircut, rate, and optionality. The OFR estimates approximately 40 entities, including primary and nonprimary dealers, and bank- and nonbank-affiliated dealers, will be covered by the rule if adopted. For more information, see the OFR's Notice of Proposed Rulemaking fact sheet."
