December 13, 1991
TO: BOARD OF GOVERNORS NO. 88-91
RE: PROPOSED RESTRICTIONS ON MONEY MARKET FUNDS
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At the October meeting of the Board of Governors, I
reported that in recent months several members of Congress and
agency officals have indicated that they are considering whether
bank type regulations (e.g., reserve requirements, FDIC premiums,
etc.) should be imposed on money market funds and bond funds. I
also reported that the Institute is taking steps to prepare for
the possibility of a full scale debate in this area, including
the retention of an outside expert on banking policy.
Attached is an article from the December 2, 1991 issue of
"Banking Policy Report" in which Carter H. Golembe calls for
legislation extending community reinvestment requirements, FDIC
insurance (and premiums) and reserve requirements to money market
funds.
We will keep you advised of developments in this area.
Matthew P. Fink
President
Attachment