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MMF Reform Discussed at Senate Banking Committee Hearing

At a Senate Banking Committee hearing last Thursday, US Treasury Secretary Timothy Geithner reiterated his belief that money market funds pose a systemic risk and called for the SEC to formally propose a range of reform options.  Mr. Geithner testified: "My own judgment is that the SEC needs to go further. They can go further. And we should get on with the business of letting them expose to the world, to the markets, a set of options that the world can comment on." 

Senator Pat Toomey (R-PA) urged Secretary Geithner to reconsider the need for additional money market reform.  He argued that the 2010 reforms may have been sufficient and questioned whether money market funds are truly susceptible to runs.  He also expressed concerns that the reforms being considered by the SEC are unworkable and could put money market funds out of business.

Written testimony and an archived webcast of the hearing are available here.