Fundsters haven't managed to kill off the proposed floating NAV regulation for money funds, at least in the eyes of two key voices in Washington, D.C. Speaking yesterday afternoon at the SEC
's planned roundtable on money market mutual funds, both Sheila Bair
and Paul Volcker
worried about the "moral hazard issue" caused by the U.S. Treasury backstopping money funds after the Reserve Primary Fund collapsed in September 2008.
, Dow Jones
all covered the roundtable. The SEC plans to release the archived webcast of the roundtable here
"Money-market investors think that if the funds make a stupid investment that the government is going to step in again," warned Bair, the outgoing chair of the Federal Deposit Insurance Corporation. She added that the stable money fund NAV is "a myth."
Volcker, former chair of the Federal Reserve, added that a floating NAV would be the "simplest" solution to the "moral hazard issue" Bair cited.
Industry insiders from Federated
and various institutional investors all attacked the floating NAV proposal.
Neil Anderson, Managing Editor
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