Fidelity Says Money Fund Reform Will 'Destroy' Industry

[Javaman]

http://www.cnbc.com/id/46589783

Fidelity Investments ratcheted up its rhetoric against money-market fund reform, warning U.S. regulators on Thursday that proposed changes would "ultimately destroy" the $2.7 trillion industry and disrupt financing for American businesses.

In a comment letter to the U.S. Securities and Exchange Commission, the largest U.S. money fund sponsor said proposals that include requiring more capital and placing restrictions on investor redemptions would be disruptive to the industry and put even greater strain on the federal guarantees that back bank deposits.

"In particular, we continue to believe that proposals such as floating (net asset value), imposing onerous capital requirements or adding burdensome redemption restrictions will ultimately destroy the money market fund industry," Fidelity said.

"The demise of money-market funds would remove important short-term financing capacity form the markets, inevitably resulting in less credit extension that would impact businesses large and small," Fidelity said.

more at link...

[hobbit709]

1. TRANSLATION: We won't be able to get our oversized bonuses for ripping off people any more.

[RC]

2. +10 Right on!

Reform is needed in all of the financial sectors. Quite often, prison time too.

[Monk06]

3. Translation, asking us to back our phoney securities with actual assets will fuck up our game.

Derivatives have to be not only controlled but eliminated or the entire monetary system
will collapse. We're already looking over the edge of the cliff and the ground is crumbling.

Oh and the first rule should be, you can't sell something unless you actually own it.

[Owlet]

4. No one should put their money in a money market fund

Put it into the money market account at your local bank. A money market fund is just that: just another mutual fund which, hopefully, won't 'break the buck' or be worth less than you've got in it. a money market account in a bank is FDIC insured. Doesn't pay a whole lot - 1% or thereabouts - but it's liquid and won't shrink on you.

[Johonny]

5. Wallstreet keeps saying these reforms will destroy it

but it's still here and seems to be doing much better than it did before the reforms. How many times can a few conservative ideologues pretend to speak for an entire industry?