ICI Viewpoints
In Case You Missed it: ICI Members Speak Out on Money Market Funds
In recent weeks, two top newspapers have published commentary from ICI members who make a compelling case for preserving the fundamental strengths of money market funds. We’ve pulled out a few highlights below, but both items are worth reading in their entirety.
On February 5, J. Christopher Donahue, President and CEO of Federated Investors, Inc. took to the pages of the Pittsburgh Post-Gazette, beginning with an observation about the centrality of the money markets in the U.S. economy. “When you use your credit card, pay your taxes and make payments on your car, student or home loans,” he writes, “you are participating in our nation's vast, nearly $3 trillion money-market system.”
Money market funds are key components of that system. A central feature of these funds is the stable $1.00 per share net asset value (NAV), which, Donahue says “is easy for investors to understand and businesses to use for record-keeping, accounting and valuation purposes.“ He also points out the negatives of requiring funds to float their NAVs, an option that policymakers in Washington are considering now:
Today, the Financial Times published an op-ed, “Not the Time to Meddle with Money Market Funds,” by Mark R. Fetting, Chairman and CEO of Legg Mason, Inc. and a member of ICI’s Board of Governors. Fetting notes the range of investors who have told the SEC why maintaining the stable net asset value is critical.
Visit our Money Market Fund Resource Center to learn more about these funds, their important role, and the recent steps to further strengthen them.
- Read “Floating Rates Won't Aid Money Markets”Floating Rates Won't Aid Money Markets” by J. Christopher Donahue, President and CEO of Federated Investors, Inc., in the Pittsburgh Post-Gazette.
- Read “Not the Time to Meddle with Money Market Funds” by Mark R. Fetting, Chairman and CEO of Legg Mason, Inc., in the Financial Times.
Mike McNamee is ICI's chief public communications officer.