PHILADELPHIA Oct 10 It would be much better if
the Securities and Exchange Commission finally moved forward
with money market reforms, instead of leaving the job to the new
U.S. financial risk council, a top Federal Reserve official said
Fed Governor Daniel Tarullo said it was unfortunate that the
SEC, the primary regulator of the funds, has so far failed to
advance new rules for the market that since the financial crisis
has been seen as posing a systemic risk.
On Aug. 22, SEC Chairman Mary Schapiro said the regulator
would not formally put forward its money market reform proposals
since three of five commissioners opposed them. That left the
next move to the Financial Stability Oversight Council (FSOC).
"Each of the options open to the FSOC and the rest of its
constituent agencies is decidedly a second-best alternative as
compared to a change in SEC rules to remove the fixed net asset
value exception, to require a capital buffer that would staunch
or buffer runs, or measures of similar effect," Tarullo said in
prepared remarks at the University of Pennsylvania Law School.
"And, when I say second-best here, I mean to include the
funds themselves," he added.