Repealing this rule -- which simply requires certain money market funds to account for their value like all other mutual funds -- is a bad idea. MM funds have (and should have) values that float up and down because their portfolios comprise investments that float up and down. /1
-
-
-
Allowing money market funds to pretend that their values are constant is (a) misleading to investors, and (b) a regulatory subsidy that allows them to compete with bank accounts -- but unlike bank accounts, which carry FDIC insurance, MM funds are not insured. /2
-
And since money market funds do not pay insurance, they are cheaper to operate than equivalent bank accounts -- so they can enjoy a better yield than their competitors without being as safe. Regulators are, in essence, allowing MM fund sponsors to project a false impression. /3
-
The article states that officials "say the rules have constrained investment choices for municipalities, many of which maintain policies that prohibit them from placing cash in investments that can decline in value." But MMF funds CAN decline in value: eg Reserve Primary Fund. /4
-
The SEC should treat MM funds like all other mutual funds: with a floating NAV, which warns investors of the fluctuation of these investments. Repealing this rule would do the opposite by granting government imprimatur that conveys a false sense of the investments' security. /5
-
The breaking of the buck showed the danger of MM funds. Faced with that hole in the ground, the SEC might take away the orange cones & warning tape around the danger; choosing instead to drape a tarp over the hole. Exactly the wrong action for a government regulator. /Fin
End of conversation
New conversation -
-
-
More importantly, why is the Dept of Justice not using anti-trust laws to make the big banks smaller, so if they fail, the rest of our financial system does not crash?
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
SEC insider trading at forefront of Trump/Deutsche Bank Scheme
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
WTF!!!!! You create a crisis in 2007/2008 Almost collapse the financial markets here and around the world. Made the US taxpayers bail your sorry asses out of a jamb that the financial industry created. Pass laws to protect the people. NOW you want to let them off the hook????
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Is that so Wallstreet can steal people's retirement founds again.
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
@SenAngusKing This is the BS you support for your Wall Street buddies. When there is another crash you will be blamed and I will see that you are.Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
For a short period in time, this was my least favorite
#SEC rule. I was a front line brokerage associate when the first fund broke the buck and triggered a panic, and even I didn’t think there was a problem this rule addressed.#law#regulationThanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.