Fed’s Dudley Calls for Wholesale Funding Market ‘Reform’
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Federal Reserve Bank of New York President William C. Dudley said “reform” of the money-market fund industry and the market for tri-party repurchase agreements is essential because they threaten financial stability.
“The sheer size of banking functions undertaken outside commercial banking entities -- even now, after the crisis -- suggests that this issue must not be ignored,” Dudley said today in the text of remarks for a speech in New York. “I don’t think we should be comfortable with a situation in which extensive maturity transformation continues to take place without the appropriate safeguards against runs and fire sales.”