Yesterday's Wall Street Journal featured the Opinion piece "Money-Market Funds Aren't What You Think" written by former Citi exec Sallie Krawcheck. She writes, "The Securities and Exchange Commission is reportedly finishing a proposal to increase regulation on money-market funds, the $2.7 trillion industry that provides corporations with an important short-term funding source and individuals and institutions with an alternative to traditional bank deposits. The SEC's aim is to reduce the risk of a meltdown in the event of another 2008-style panic. Its proposal is said to include mandating capital backing for money funds and ending their convention of reporting assets at a fixed $1 net asset value -- instead having it "float" to represent the funds' underlying value, as with other mutual funds. The industry opposes additional regulation, arguing that earlier SEC actions are sufficient. But meaningful risk -- and significant misunderstanding of this risk—remains in this business, and additional reforms can help.... Here's what individual investors in money funds know: They know that on their brokerage statements, their money funds are always valued at 100 cents on the dollar, in good times and bad --giving them a sometimes-false sense of stability and safety. They know that money funds are reported in the "cash" section of their statements -- again strongly implying safety. And some know that, even during periods of significant market instability, money-fund providers have gone to painful lengths to return that 100 cents on the dollar—not to "break the buck.""

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