market funds remain firmly opposed to proposals that would force
them to abandon their stable per-share value. And we are not alone
in that stance. Americas businesses, along with state and
local governments, are rallying in opposition to any suggestion
that regulators would force money market funds off their stable
$1.00 net asset value.
of floating these funds value is likely to be discussed
in the Presidents Working Group report, whenever it may
be issued. And its still in the air at the SEC, which is
contemplating a round two rulemaking to address any
lingering issues in money market funds and Rule 2a-7.
of the floating NAV see this idea as a home run a way to
solve any problems of systemic risk that might somehow arise from
money market funds with one swing of the bat.
its more of a foul ball.
money market funds to float their NAV will not eliminate the chances
of investor runs. Nor will it reduce risks to the financial system
in a severe liquidity crisis. What it will do is destroy money
market funds as we know them imposing severe dislocations
on Americas households, businesses, and governments, and
disrupting the American economy.
we have been making this case to anyone who will listen, and urging
users of money market funds and issuers in the money markets to
speak out. And Im pleased to report that they are responding.
In the last
several weeks, groups representing state and local governments
have come out squarely in opposition to forcing money market funds
to float. The National Association of State Treasurers; the Government
Finance Officers Association; and the National Association of
State Auditors, Comptrollers, and Treasurers all have voiced
their support for the ability of funds to operate with a stable
own Investor Advisory Committee has before it a resolution, strongly
backed by one of its subcommittees, that calls upon the Commission
to preserve the stable NAV as a core feature of money market funds.