Sheila Bair, former chair of the Federal Deposit Insurance Corporation (FDIC) and current chair of the Systemic Risk Council, issued a statement supporting SEC Chairman Schapiro's money market reform proposal. She also called on the Financial Stability Oversight Council (FSOC) to force the SEC's hand if it refuses to submit the proposal for public comment:
"[I]f the SEC fails to move forward, we believe the FSOC should use the full range of authorities given it under Dodd-Frank to effectuate these reforms. These authorities include recommending and directing the SEC to move forward with them."
The money market fund reform proposal reportedly under consideration by the SEC would require funds to either float their NAV or maintain a capital buffer and implement holdback provisions so that investors could not withdraw their entire investment at one time. The Systemic Risk Council was recently formed by the CFA Institute and the Pew Charitable Trusts to monitor and encourage regulatory reform of U.S. capital markets focused on systemic risk.