Tanega, Joseph; Baklanova, Viktoria --- "European money market fund regulations and universal transparency" [2018] ELECD 359; in Chiu, H.-Y. Iris; MacNeil, G. Iain (eds), "Research Handbook on Shadow Banking" (Edward Elgar Publishing, 2018) 337

Book Title: Research Handbook on Shadow Banking

Editor(s): Chiu, H.-Y. Iris; MacNeil, G. Iain

Publisher: Edward Elgar Publishing

ISBN: 9781785362620

Section: Chapter 12

Section Title: European money market fund regulations and universal transparency

Author(s): Tanega, Joseph; Baklanova, Viktoria

Number of pages: 26

Abstract/Description:

Money market funds since the financial crisis of 2008–09 have been the focus of heated debate and, with the introduction of the proposed European regulation on 4 September 2013, more controversy ensued. By the summer of 2017, a political agreement has been reached regarding the new regulation. We do not consider what specific details should be incorporated; our focus is merely to present the diverse European money market fund industry and to recommend the adoption of the Office of Financial Research’s (OFR’s) monitoring system for the promotion of transparency in the money market funds system. The fragmentation of the industry has been viewed as not only a source of confusion for investors, but also as a significant challenge in fostering a single market for financial services. We contend that the European money market fund industry rests on the outcomes of two divergent trends: further harmonization of investment products toward the convergence of investment and regulatory practices, and a desire for product differentiation. These two trends underscore two different types of transformations related to the development of money market funds in Europe: (1) from the very market practices that exist de facto to their capture and replication de jure; and (2) from the de jure ideals of fair rules that encourage further and deeper de facto market developments.