“The leaders of all 12 regional Federal Reserve banks said Thursday that a regulatory plan to rein in the $2.6 trillion money-market mutual-fund industry doesn’t go far enough to address risks posed by the funds.

“The regional Fed presidents called on the Securities and Exchange Commission to expand a key portion of its plan for tightening rules on the types of funds prone to investor runs during the 2008 financial crisis, saying the SEC’s current approach ‘seems imprudent.’

“At issue is an SEC proposal to require only “prime” funds held by corporate treasurers and other institutional investors to abandon their fixed $1 share price and float in value like other mutual funds. Prime funds invest in short-term corporate debt and are considered more risky than funds that buy only government securities. Those held by institutional investors account for about 30% of the industry, according to Crane Data LLC.

“The Fed bank chiefs said the agency should expand the proposal to funds that cater to retail investors, saying that could dampen incentives to flee in times of market stress.”

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