U.S. Treasury-Led Report Calls For Overhaul Of Money Market Funds

• U.S policymakers need to consider major changes to make money market funds less vulnerable to investor runs, a working group led by the Treasury Department said on Tuesday, stopping short of making specific recommendations.
• The group laid out several potential changes to those markets, in which the U.S. government intervened to stabilize after big outflows prompted by the coronavirus outbreak in March.
• Ideas included setting stricter rules around fund redemptions, or higher capital buffers for such funds, but the group said it was not favoring any specific approach.
• The report could kick off a broader effort to overhaul money market funds. Former Federal Reserve Chair and incoming Treasury Secretary Janet Yellen are expected to review so-called "shadow banking," which includes such funds.

(Source: Reuters)