The Future of New MMF Rules
What do you get when you finally have a global proposal to govern money-market funds (MMFs), a gigantic 2020 Fed intervention backing up a sector that also needed help in 2008, and an overnight reverse-repo program (ONRRP) trending towards a trillion? Tough U.S. MMFs standards, that’s what. Two in-depth FedFin reports this week assessed both the length and breadth of the Financial Stability Board’s consultation and its impact on the agency-debt market. These both make it clear that the FSB has now decided against another round of toe-to-toe combat with the asset-management industry. After the 2008 crisis and the fund rescues that followed, global regulators fought for systemic-designation criteria, activity-and-practice identifiers, and other standards to bring the sector under what it strongly insisted was inappropriate, unnecessary, and unduly bank-like standards. So matters rested until the aforesaid 2020 crisis.