A recent op-ed by Sallie Krawcheck, former president of global wealth and investment management at Bank of America, strongly supported the money market fund reforms being considered by the SEC. Ms. Krawcheck stated that most individual investors have a "sometimes-false sense of stability and safety" about money market funds. A floating NAV, in her opinion, would signal to shareholders that money funds are not guaranteed. She also supported a capital buffer as a way of improving the safety of the business. Ms. Krawcheck is comfortable with the possibility that additional regulations may shrink the industry. In her opinion:
If industry growth is built on clients misunderstanding its underpinnings, and if industry profitability is built on inherent under-capitalization, then better to provide real transparency. This will allow investors to make informed choices and allow market forces and innovation to work their magic-perhaps producing new, more favorable cash solutions for investors and funding sources for corporations.
Ms. Krawcheck was president of global wealth and investment management at Bank of America until last year. She has also held senior positions at Citigroup and Sanford C. Bernstein & Co.