The Federal Reserve is signaling that the coronavirus disruptions that hit financial markets in March indicate prime money market funds and other sources of short-term funding may need tougher rules.
"The runs on prime money funds and commercial paper were particularly disappointing," Fed vice chairman of supervision Randal Quarles said in prepared remarks for a Thursday speech. He added that "it is worth asking whether there may be other steps needed to secure these very important sources of liquidity."
Quarles, speaking at an Institute of International Finance event, also said that this year's tumult raises questions about whether regulations imposed on money market funds after the 2008 financial crisis "fell short." Quarles said the Financial Stability Board (FSB), a group of global financial regulators he heads, will be examining this issue.
|See also:
- Money Fund Madness in March: Why the flood of corporate short-term investments out of prime money funds was borderline irrational—and what corporate treasury teams can learn from it.
- MMF Opportunity in Volatile Markets
- Still Ignoring the Risks Inherent in Bank Deposits?
- Revisit Your Corporate Investment Policy
|
Continue Reading for Free
Register and gain access to:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
