“FOR a moment last week, watching the Senate Banking Committee hearings on money market mutual fund reforms, I thought I had fallen into a time warp. As Mary L. Schapiro, the chairwoman of the Securities and Exchange Commission, outlined proposals meant to ensure that taxpayers would never need to bail out a money fund, some of the sharp questioning she received had a depressingly familiar ring.

““In my view you’re portraying an industry that’s extremely vulnerable, that has all these risks of runs, and I really find that extraordinary in light of the actual history,” needled Senator Patrick J. Toomey, a Pennsylvania Republican, citing the failure of just one money market fund — the Reserve Fund in 2008 — throughout years of crises and panics. “You’re telling us that this is a very vulnerable industry and there’s great threats of a run and using that to justify regulations that I think threaten the very existence of this industry.””

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Read Gretchen Morgenson’s full article here