Fein Blasts Rosengren Speech
Counsel Melanie Fein is the most recent comment letter to the SEC and PWG. She blasts Boston Fed President Eric Rosengren's recent "Money Market Mutual Funds and Financial Stability" anti-money fund tirade, writing, "I am a former Fed attorney who has been involved in regulatory matters affecting the banking industry as well as the mutual fund industry for three decades.... I have represented both banks and MMFs and thus have a client-related as well as academic interest in the outcome of the debate over whether structural changes are needed for MMFs. I have been greatly troubled by statements made by Federal Reserve officials that I believe distort the facts concerning MMFs and their role in the financial system. In particular, I am concerned about proposals advocated by yourself and other Fed officials that do not appear to be supported by the level of economic analysis that is called for given what is at stake -- the survival of MMFs as efficient investment vehicles valued by millions of individual and institutional investors and which play an important role in the financial system. Some of the proposals and public statements seem disingenuous and have an amateurish "shooting from the hip" quality that I feel is beneath the dignity of the nation's central bank. For example, the assertion in your speech that "prime funds played a critical role in the amplification of financial problems in recent years" is unsupported by any facts, analysis or elaboration whatsoever other than a reference to the Reserve Primary Fund's "breaking the buck" which was an event that many believe was caused by the Fed itself."
