U.S. Securities and Exchange Commission Chairman Mary Schapiro will tell a Senate panel today that money-market mutual funds are vulnerable to runs and must face rules to avoid taxpayer bailouts.

"Unless money-market fund regulation is reformed, taxpayers and markets will continue to be at risk that a money-market fund can transform a moderate financial shock into a destabilizing run," Schapiro said in testimony prepared for a Senate Banking Committee hearing. "In such a scenario, policy makers would again be left with two unacceptable choices: a bailout or a crisis."

Schapiro said lawmakers that money funds should be required to float their net asset values or increase their capital buffers. She also said that limits on redemptions could "further enhance a money-market fund's resiliency."