Investment News writes "Money market funds still face contagion risk: SEC's Plaze". The article says, "What keeps Robert E. Plaze up at night? The deputy director of the Securities and Exchange Commission's Division of Investment Management no doubt loses sleep over the thought that mistakes made by one money market fund could spread throughout the industry and cause another run on money market funds." IN quotes Plaze, "There have been hundreds of money fund bailouts, where the funds would have broken the buck if the manager hadn't stepped in. We continue to see risks and we're worried that another event could occur." The piece adds, "He's particularly concerned about 'outliers' that are able to deliver a high yield in a low-yield world. The average yield on money market funds is just 0.02% today, down from 4.7% at money market funds' peak in June 2007. Publicly traded companies that offer money market funds also are under increased pressure to generate more fees from the funds to generate more profits. Last year, firms waived $5.7 billion of money market fees, while collecting only $4.7 billion, for example.... That's why Mr. Plaze believes that further regulation of money market funds is necessary, he told attendees at the Investment Company Institute's 2012 Mutual Fund and Investment Management Conference, although he wouldn't commit to which of the rumored proposals would be best."
