According to recent press reports, the Securities and Exchange Commission (SEC) is considering releasing a controversial proposal to impose additional capital and liquidity regulations on the $2.7 trillion money market fund industry (MMMFs) and to replace the fixed $1 net-asset value ("par value") rule now used by all MMMFs to redeem customer funds with a mark-to-market (NAV) requirement. 

Peter Wallison on new regulations based on the bogus belief that the cause of the financial crisis was the interconnectedness of financial institutions.

The financial crisis was caused not by Lehman’s failure but by a common shock to all financial institutions that were holding privately issued mortgage-backed securities based on subprime loans. The way to prevent future financial crises is to prevent future common shocks.

Larry Lindsey, with his profound knowledge of Washington ways, has absolutely nailed the principal guiding motto of all regulatory bureaucracies: "Cross us and we will make you pay."

It’s depressing to watch, but it is missing the point that the Volcker rule would not have prevented the loss and is probably unworkable.

The $2 billion loss at JPMorgan Chase (JPM) has reopened debate on the Volcker rule. The proponents of the rule have seized on the story as proof that the Volcker rule is necessary and should be quickly put into effect by regulation. In reality, however, if the facts are as thus far reported, what happened at JPMorgan is proof that the Volcker rule is unworkable and should be repealed. 

The Basel Committee on Banking Supervision (Basel Committee) is proposing to regulate bank liquidity. This marks a major innovation in the Basel approach to international banking regulation.