"Fed's Dudley Backs Money Fund Rules"
Bloomberg writes "Fed's Dudley Backs Money Fund Rules to Guard U.S. Economy". (See the Dudley Comment here.) It says, "William C. Dudley, president of the Federal Reserve Bank of New York, said new rules are needed to protect the financial system from a run on money-market mutual funds, lending his support to a regulatory overhaul proposed by U.S. Securities and Exchange Commission Chairman Mary Schapiro." Dudley says in a Bloomberg View column, "A glaring vulnerability exists with money-market mutual funds. Money funds should have capital buffers and modest limits on investor withdrawals. Such reforms are necessary to protect the economy from financial instability in the future." The piece adds, "Capital cushions and redemption restrictions are part of Schapiro's plan to bolster money-fund regulation. She has so far failed to win enough backing among her four fellow commissioners, who may vote as early as this month on whether to ask for public comment or kill the proposal."
