The Wall Street Journal's "For Banks, Rate Rules Could Mean Tough Times" says, "Banks deemed to be less than 'well capitalized' by the Federal Deposit Insurance Corp. won't be allowed, starting Jan. 1, to pay more than 0.75 percentage point above the U.S. average. Just 4% of the nation's 8,185 federally insured banks weren't well-capitalized as of June 30. But weaker banks 'drive up costs for the rest of the industry' by offering unusually high rates to lure deposits, FDIC Chairman Sheila Bair said when the rule was announced in May." This is of course, good news for money funds, who have been forced to compete with a number of outlier banks paying distressed rates. In other news, the U.K.-based FT Adviser says "The IMA will change the name of its Protected/Guaranteed sector to Protected".
