Money Markets Must Be Reformed: Pimco Executive

Friday, 16 Apr 2010 02:41 PM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
A top executive at the world's largest bond fund says that money market mutual funds should not exist in their current form.

Pacific Investment Management Co's (Pimco) Paul McCulley told a Levy Economics Institute conference Thursday that money market funds contributed directly to the instability of the financial system by acting as foundation for the shadow banking system.

McCulley's remarks followed a similar call by former Federal Reserve Chairman Paul Volcker at the same conference.

Volcker proposed money market funds be regulated in a fashion similar to banks. He called for tighter restrictions on the types of assets in which they could invest.

"My viewpoint is very similar to Chairman Volcker's viewpoint, that this should not be a sidebar issue in regulatory reform," McCulley said.

"It is a bank and it has absolutely no capital," McCulley said of the structure of money market funds. McCulley runs Pimco's approximately $500 million money market fund.

McCulley said the run on money market funds after the collapse of Lehman Brothers in the fall of 2008 showed the need to bring them under the supervision of regulators who could backstop them if they falter.

© 2014 Thomson/Reuters. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Boehner's Christmas Carol Celebrates a GOP Congress

Thursday, 18 Dec 2014 23:15 PM

Republican House Speaker John Boehner put his own political spin on "a Christmas reading" on his YouTube page Thursday,  . . .

Dershowitz: Hollywood Should Have Followed Rushdie Example

Thursday, 18 Dec 2014 22:29 PM

Hollywood should have rallied around Sony Pictures and released "The Interview" jointly online, says Harvard law profess . . .

Army Pulls ROTC Job Posting Requiring Christian Candidates

Thursday, 18 Dec 2014 22:18 PM

The Army has pulled a job posting at an Illinois religious college that required leaders of its ROTC program to be Chris . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved