BlackRock's Response to the PWG Report
BlackRock's Response to the PWG Report says, "The Treasury Department has now released its Report of the President’s Working Group on Financial Markets: Money Market Reform Options. On October 21, 2010, the President's Working Group on Financial Markets released a report related to the reform of the money market industry. The ideas discussed in the Report are ones that have been under discussion in various forums within the industry since the financial crisis of 2008, including for example: An industry liquidity facility; A tiered money market industry; A floating money market NAV per share, among others.... To the extent they are warranted, BlackRock favors changes to the money market industry that would have the following characteristics: Preserves the stable NAV as this is a crucial feature to our clients; Does not have the effect of sharing or socializing risk among industry participants; Does not directly apply a bank model given the very different structure of money market funds. BlackRock will continue to express its views and provide support to the SEC and all other regulators. We welcome continued debate around means to strengthen money market funds. However, we urge caution and careful consideration in introducing further change which may not serve to protect shareholders or support growth in the wider economy." In other news, see "FSA warns firms on Money Market funds," which says, "The [U.K.-based] FSA is warning firms against using the word 'cash' when naming Money Market Funds (MMFs), saying it is 'potentially misleading'. It says the word cash implies little or no risk to investors' capital when in fact the current low interest rate environment, combined with annual management charges, has created negative yields for some funds."
