Money Funds Push $24 Billion Backstop as Clash Looms Over Rules
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The mutual-fund industry fleshed out a plan for a private backstop to money-market funds, rejecting alternatives considered by U.S. regulators that include abolishing the funds’ stable $1 net asset value.
The industry’s plan, proposed in a letter yesterday by the Washington-based Investment Company Institute, calls for fund companies to finance a private bank with $350 million in assets that would grow to $24 billion after 10 years. Other options are impractical, unworkable or fail to address the most important risk to money funds, the ICI said in its letter.