BoE's Bailey: Need to structure money market funds consistent with their role

Eren Sengezer FXStreet

"2020's 'dash for cash' shows post-2008 reforms left a dangerous gap in our exposure to the risk of financial instability," Bank of England (BoE) Governor Andrew Bailey said on Wednesday.

Additional takeaways

"We need to structure money market funds consistent with their role."

"Money market funds as currently structured may often be perceived as cash-like but cannot make good on this expectation in a sufficiently wide range of market conditions."

"Redemption terms should be aligned with the underlying liquidity of assets."

Market reaction

The GBP/USD pair showed no immediate reaction to these comments and was last seen losing 0.23% on a daily basis at 1.4110.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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