The Good, The Bad & The Ugly – Week of April 29, 2013

The Good

  • A leaked proposal from the European Commission on new regulations for money market funds calls for many of the same measures – a 3% buffer, eliminating amortized accounting, etc. – that we recommended in our letter to the Financial Stability Oversight Council. Steve Johnson of the Financial Times, April 28, 2013 (subscription req’d).

The Bad

  • Meanwhile, the path to money market fund reform in the US is looking dicier by the day. Not only is the SEC under Mary Jo White being more secretive about its process (one report from the WS Journal quotes figures saying that the Fed and Treasury have been excluded from rulemaking), but some signs indicate that the agency is already conceding to industry by narrowing its focus to prime funds. We’ll be watching closely. Andrew Ackerman of the Wall Street Journal, May 2 and May 3, 2013.
  • We included the Brown Vitter bill addressing Too Big to Fail in “The Good” last week. While it’s not perfect, it’s a step in the right direction. But predictably, the biggest banks and their proxies have come out against the bill with guns blazing. Jesse Eisinger in Dealbook/NY Times (May 1, 2013) gives an overview of the debate, while Matt Taibbi of Rolling Stone (May 1, 2013) dissects a particularly shameful piece of advocacy by Standard & Poor’s.

 The Ugly

  • Adam Davidson writes a long piece in the NY Times (May 2, 2013) on Larry Summers and Glenn Hubbard, in which he inadvertently sums up the depressing state of US economic policy by stating that “the space between their views roughly defines the American center.” When Mr. Deregulation defines the far left of the acceptable policy space, we’re in trouble.

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