Chairman Schapiro gave an emphatic speech last Friday about the need for money market fund reform, stating:
[I]nvestors have been given a false sense of security by money market fund sponsor support and the one-time Treasury guarantee. Funds remain vulnerable to the reality that a single money market fund breaking of the buck could trigger a broad and destabilizing run. Should that happen, the government will not have the tools it had in 2008. Then, Treasury used the Exchange Stabilization Fund to stop the run. But Congress eliminated that option when it passed TARP legislation. Today, the money-market fund industry and, by extension, the short-term credit market, is working without a net. To the extent that there's a deadline, it's the pressure that we should feel from living on borrowed time.
As previously reported in the press, she noted that the two serious options being considered by the SEC are, first, floating the NAV and, second, imposing capital requirements, combined with limitations or fees on redemptions.