They're at it again ! We would not be facing tax payer losses of $200 BILLION and national financial chaos if the congress and Bill Clinton had not removed the protective Glass-Steagall law of 1933, on November 12, 1999, the Gramm-Leach-Bliley Act.
Now we have a proposal to remove safe guards relating to all Money Market Funds in the USA. Here is what Vanguard says:
"Valley Forge, Pa-based Vanguard, which has more than $1 trillion under management, criticized the SEC's plans to reduce reliance on credit ratings, contending that the proposals risked removing important investor protection."
"The most significant portion of the proposals would make it possible for U.S. money-market funds to invest in short-term debt without regard to ratings put on those securities by firms such as Moody's Investors Service, Standard & Poor's and Fitch Ratings. The proposal would put more discretion in the hands of money managers to determine whether the debt is investment grade."
"However, in a letter responding to the SEC this month, John Brennan, chairman and chief executive of Vanguard, said the firm "strongly opposes the commission's proposal to eliminate references to credit ratings in Rule 2a-7 - a rule that has provided a strong regulatory framework for money market funds since its adoption 25 years ago."
Mr. Brennan, one of the industry's most outspoken critics, said: "It is our view that the proposed elimination of ...ratings would remove an important investor protection from Rule 2a-7, weaken investment standards, and, potentially, pose a risk to the long history of stability of the $3.5 trillion money-market-fund industry." "Ratings-even if occasionally imperfect-protect investors by establishing a uniform, minimum credit quality for all money-market funds. Removing that investor protection is akin to outlawing seat belts with the hope that drivers will be less likely to be injured if a defective belt fails in a crash."
If you care to, please contact your Senate and House representative to stop this SEC proposal. We should not sit by like flower pots, imo.