Recently published proposals from the International
Organisation of Securities Commissions (Iosco) have not
eliminated concern from key market participants on regulating
money market funds (MMFs).
Speaking at the European Commission’s (EC)
shadow banking conference on April 27, Brian Reid, chief
economist at the Investment Company Institute, predicted
problems with the proposed capital rules.
"The proposals largely that are being fashioned and
considered are designed to eliminate all the risk," said Reid.
"That’s not possible if we want to keep these
products viable in the marketplace."
The chief economist suggested that capital could be put in
place to help fund managers adjust to market liquidity issues,
allowing them to sell at...