Bloomberg writes "Funds May Exit Reverse Repos in Seven Days Under Fed Terms", which comments, "The Federal Reserve Bank of New York said money-market mutual funds would be able to exit reverse repurchase agreements within seven days if policy makers use them when the central bank begins draining the record amount of cash added to the banking system. A seven-day put option would allow funds participating in the reverse repo program to have a percentage of investments in relatively liquid assets, the New York Fed said on its website today. Firms in the more than $3 trillion U.S. money-market mutual fund industry should be able to sell 10 percent of their assets in one day and 30 percent within a week under Securities and Exchange Commission guidelines. A reverse repo contract isn't considered liquid beyond seven days." In other news, see Boston Globe's "A case of regulatory jitters, which quotes former Fidelity executive Robert Pozen, "Money market funds should not be deemed systemically risky just because two funds ... lost 6 cents on a dollar."
