Money Markets Must Be Reformed: Pimco Executive

Friday, 16 Apr 2010 02:41 PM

 

Share:
  Comment  |
   Contact Us  |
  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.

Share:
  Comment  |
   Contact Us  |
  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.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

US Capital Votes to Allow Concealed Firearms

Tuesday, 23 Sep 2014 18:48 PM

City council members voted unanimously but reluctantly Tuesday to allow residents and visitors alike to carry concealed  . . .

RFK Jr.: 'Do I Think the Koch Brothers Are Treasonous? Yes I Do'

Tuesday, 23 Sep 2014 18:38 PM

There ought to be a law against climate-change deniers, according to activist Robert F. Kennedy Jr.
In an interview . . .

NYC Politicians Criticize Anti-Islam Ads Due to Run on Buses

Tuesday, 23 Sep 2014 18:22 PM

New York City politicians and religious leaders on Tuesday criticized a series of anti-Islam advertisements due to appea . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

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