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(This post has been updated for October 31st data.)

The SEC released its money market fund statistics for the end of October, giving us a comprehensive view of the impact of the reforms which took effect on October 14th. We now have government, retail and floating NAV money market funds, the later two with the potential for liquidity fees and redemption gates. The Wall Street Journal has run a number of stories about the “unintended” consequences of the reforms. The impact on the funds has been entirely consistent with the comments the SEC received on the proposed reforms–so this outcome should have been expected. By the time the dust fully settles, FSOC may have momentarily succeeded in its objective of reducing the assets of prime money market funds to a level where they cannot pose a threat to the stability of the financial system, assuming they ever did.…
Continue Reading What Hath FSOC Wrought?

My earlier post speculated on the reasons the D.C. District Court struck down the Financial Stability Oversight Counsel’s (“FSOC”) designation of MetLife as a non-bank systemically important financial institution (“SIFI”). The court unsealed its opinion on April 7, and my tealeaf reading was generally accurate. FSOC appealed the decision almost immediately. But I wonder if an appeal is the best response to the district court’s order?…
Continue Reading MetLife v. FSOC: Alternatives to Appeal?

MetLife won the first round in its fight against designation as a nonbank systemically important financial institution (“SIFI”). The court’s opinion will be under seal until at least April 6, so we do not know why the court rescinded the Financial Stability Oversight Council’s (“FSOC’s”) designation. But connecting the dots between the order and MetLife’s complaint suggests some intriguing results.…
Continue Reading MetLife and the Cost of SIFI Designation