Bair Says Money Funds Are Systemic Risk SEC Must Regulate

Sheila Bair, former chairman of the Federal Deposit Insurance Corp., said the $2.5 trillion money-market mutual fund industry poses a potential risk to the financial system and the U.S. Securities and Exchange Commission should take responsibility for regulating it.

“It’s not stable” and the industry is “a systemic risk,” Bair told reporters today at a conference in New York organized by the National Association for Business Economics. “The SEC is responsible, and they haven’t moved forward.”