Reactions to FSB MMF Report
Yesterday, we wrote in our Link of the Day that the FSB Issues Final Report on MMFs. Today, we quote from some previous comments and some new reactions, and watch for full coverage of the report in tomorrow's News. ICI President & CEO Eric Pan tells us, "ICI research overwhelmingly shows that delinking the regulatory tie between the liquidity thresholds and possible use of fees and gates is the most effective reform proposed by the FSB's final money market fund report. As U.S. policymakers consider the FSB's recommendations, we urge them to adopt the delinking reform and start their own review of short-term funding markets. A holistic examination of all the factors leading to the freezing of the short-term funding markets in March 2020 is critical to increasing financial market resiliency. The FSB and IOSCO themselves acknowledge the importance of this work by committing to analyze and enhance the functioning and strength of short-term funding markets. We look forward to working with them and US policymakers on their analyses." As we mentioned yesterday, the Financial Stability Board, published the releases, "Policy proposals to enhance money market fund resilience: Overview of the responses to the consultation" and, "Policy proposals to enhance money market fund resilience: Final report." See our July 1 News, "FSB Policy Proposals for Money Fund Resilience; Broad Range of Options," and see these previous stories for more: "More Comment Letters to FSB: HSBC AM, BNP Paribas, Amundi and Aviva" (9/7/21), "Federated Tells FSB: Eliminating Central Bank Intervention Unrealistic" (9/1/21), "BlackRock's FSB Comment: Address STFM Root Causes, 15% Daily Liquid" (8/26/21), "Fidelity to FSB: Narrowly Construct" (8/25/21), "JPMAM's Donohue to FSB: Reform Must Be Calibrated and Contextualized" (8/24/21), "Vanguard Comment Letter to FSB Urges Floating NAV, More Liquidity for Prime MMFs" (8/23/21) and "ICI Comments on Financial Stability Board's Report; ICI MMF Holdings" (8/18/21).
