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Rating:Jaffe Expects Email Routing List Email & Route  Print Print
Monday, July 16, 2012

Jaffe Expects "Ineffective Overkill" on Money Fund Reform

News summary by MFWire's editors

All of the fighting in Washington over money fund reforms is not winning over the financial press. In his latest column, MarketWatch syndicated-columnist Chuck Jaffe worries that the SEC's soon-to-be-released round two of new money fund regs could be "ineffective overkill" at preventing the next money market mutual fund run.

Jaffe writes that your piggy bank is "pretty much like a money-market fund account. Except no one thinks your piggy bank is broken."

He opposes both abandoning the fixed NAV for money funds and the calls for a capital buffer. Instead he pushes for FDIC-like government backing:
Ultimately, investors want a guarantee, or at least some assurance that the Federal Reserve or the Treasury will step in; that's what will calm the markets better than any legislation, and chances are that any next run will require that kind of action.
Peter Crane of Crane Data offered his insight to Jaffe for the piece. Jaffe expects the SEC to release its latest proposals "probably in the next few weeks." 

Edited by: Neil Anderson, Managing Editor

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