Money Market Funds (“MMF”) are an important vehicle that investors rely on and that business, as well as state and local governments, use for short-term cash management. In fact, MMF’s encompass 40% of the commercial paper market.
The Report finds that now is not the time to engage in further MMF regulations because additional regulations will:
- Increasing costs in a low yield environment that will drive many MMRs out of business harming investors;
- increase borrowing costs, while impeding capital formation and cash management for businesses ultimately harming economic recovery;
- increase borrowing costs and restricting cash management for state and local governments potentially leading to tax increases;
- concentrating and increasing the threat of systemic risk.