U.S Chamber publishes "Money Market Mutual Fund Reform: The Dangers of Acting Now"
A press release says, "The U.S. Chamber of Commerce's Center for Capital Markets Competitiveness (CCMC) released today a white paper titled, "Money Market Mutual Fund Reform: The Dangers of Acting Now," which examines the impacts of possible reforms to money market mutual funds (MMMFs) on businesses, municipalities, individual investors and the overall economy. The paper, authored by Georgetown University Professor James J. Angel, finds that contemplated reforms intended to reduce the chance of runs on MMMFs could, in fact, have the opposite effect and increase systemic risk. Reforms could have far reaching consequences well beyond the fund industry. The paper warns that the dangers of acting now include: Shrinking and fundamentally altering the MMMF industry; Significantly higher interest rates for issuers of commercial paper; Higher costs for state and local governments, pressuring them to increase taxes; Higher borrowing costs for corporations and governments, dampening economic recovery; An increase in systemic risk and pressure on capital adequacy for big banks; and, Decreased yields for retail investors."
