Fed Slams SEC’s Plan for U.S. Money Markets

in-god-we-trust_lThere is a quiet feud brewing in the most eclectic of places, between the masters of the universe. It concerns the protection of investors in money markets, but it is really about the flow of money into and out of the Federal Reserve.

Eric Rosengren, president of the Boston Fed branch who has long called for reform in the $2.5-trillion industry, took aim at one part of the SECs two-part plan to protect investors in times of stress like the 2008 financial crisis.In the fall of that year, money funds threatened to freeze global markets as investors rushed to flee the well-known Reserve Primary Fund because of its heavy holdings of collapsed investment bank Lehman Brothers. The fund was unable to maintain its $1-per-share value, a situation known as “breaking the buck.”

via Feds Rosengren slams SECs plan for U.S. money markets | Reuters.

Photo credit: kevin dooley / Foter / CC BY

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