"Money-Fund Shakeout Bubbles Up"
The Wall Street Journal writes "Money-Fund Shakeout Bubbles Up". It says, "A game of regulatory roulette is renewing scrutiny of money-market mutual funds and could drive further consolidation in the $2.8 trillion industry. A report on money-fund overhaul options by the President's Working Group on Financial Markets, released last week, left on the table several overhaul measures that the industry has spent about two years opposing. Without fully endorsing or dismissing any particular changes, the report analyzed such steps as subjecting funds to banking regulations or requiring them to have floating share prices. More should be done to address money funds' susceptibility to runs, the report said." It quotes Moody's Henry Shilling, "The drumbeat continues for money-fund overhaul.... It's not a subject that the industry will be able to sweep under the rug." The Journal adds, "With some fund firms already backing away from the money-fund business, the prolonged regulatory uncertainty could favor the largest players and hasten industry consolidation, analysts say. Smaller firms may not be able to absorb the cost of further change, Mr. Shilling says."
