Live Blogging at the Dodd-Frank Symposium: Systemic Risks, as well as Benefits, of Money Market Funds

(click here to see the full abstract of Mr. Mark Perlow’s presentation at the Symposium) The financial crisis demonstrated clearly that money market funds present certain systemic risks when they “break the buck.” Before the crisis there were already a number of regulations in place for money market funds, on matters such the ratings of investments that money market funds can invest in, disclosure of investments, and net asset value per share ratios (among others). In response to the financial crisis, new regulations have been passed or are being proposed to mitigate the risks of runs on these funds in the future. Mr. Perlow notes that money market funds provide a socially useful alternative to the banking system (particularly for certain, essential financing purposes and maturity transformation in the market) which may warrant caution in future regulation.