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April 12, 2021

Better Markets Urges Robust Reforms So Money Market Funds Don’t Need Another Taxpayer Rescue


April 12, 2021

Contact: Pamela Russell at 202-618-6433 or

Washington, D.C.  –   Stephen Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the filing of a comment letter to the SEC today on the need for additional regulation of money market funds (MMFs):

“Finishing the job of regulating MMFs is vitally important and long overdue. The SEC’s request for comment is an encouraging sign that the Commission will soon embark on a rulemaking that could finally accomplish that goal.

“The shortcomings in the regulation of MMFs were starkly revealed in 2008 when the collapse of Lehman Brothers precipitated a crisis in the MMF sector that resulted in a massive government bailout and backstop. Less than 12 years later, the MMF marketplace again faced a crisis that required emergency government support as a result of the COVID-19 financial turmoil last March. The piecemeal MMF reforms that the SEC adopted in 2010 and 2014 were inadequate on their face, and now experience has removed any doubt. MMFs continue to pose a serious threat to the stability of the financial system.

“In its request for comment, the SEC seeks input on 10 possible reforms that the President’s Working Group laid out last December, which could spare taxpayers from yet again having to rescue the MMF sector. In our comment letter, we urge the SEC to apply them in combination.  Above all, the SEC must float the net asset value or “NAV” for all MMFs and establish a strong capital buffer requirement.  And it must discount the expected sky-will-fall objections from industry.

“Finally, as we explain in our letter, if the SEC cannot adopt the necessary reforms, then the basic approach to MMF regulation should change and MMFs should be subjected to a bank-like regime. This would be an appropriate outcome, as MMFs have been allowed to offer a unique combination of bank-like and investment-like features, all without shouldering the cost of deposit insurance or equivalent measures that banks must have in place. MMFs have had the luxury of turning to taxpayers when they need a safety net. Thus, through either SEC regulation or an effective alternative, the threat that MMFs pose to financial stability must be addressed once and for all.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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