BOSTON, Sept 11 Fidelity Investments, the
largest provider of U.S. money market funds, told Securities and
Exchange Commission officials that proposed industry reform
could increase the borrowing costs of U.S. municipalities by up
to $13 billion, according to an SEC memo.
During an Aug. 16 meeting with the SEC's Division of
Economic and Risk Analysis, Fidelity officials said U.S.
municipal financing costs could increase anywhere from $1
billion to $13 billion, depending on the amount of money
market-related funding that is refinanced with more expensive
A Fidelity slide presentation with the figures was part of
the discussion with regulators, according to the memo Reuters
obtained on Wednesday.
Money market funds currently provide low-cost financing to
U.S. states and cities by buying the short-term debt they issue
to fund their operations.