Economics
Fed Signals Prime Money Market Funds Need Stiffer Rules
- Quarles calls March run on funds ‘particularly disappointing’
- He says FSB examining whether post-crisis reforms fell short
Photographer: Brendan Smialowski/Bloomberg
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The Federal Reserve is signaling that the coronavirus disruptions that hit financial markets in March indicate prime money market funds and other sources of short-term funding may need tougher rules.
“The runs on prime money funds and commercial paper were particularly disappointing,” Fed Vice Chairman of Supervision Randal Quarles said in prepared remarks for a Thursday speech. He added that “it is worth asking whether there may be other steps needed to secure these very important sources of liquidity.”