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U.S. risk council considers systemic designation for money funds

Dec 14 2012 Sarah N. Lynch, Reuters

The U.S. risk council on Thursday discussed potentially using its powers under the 2010 Dodd-Frank law to impose more regulatory oversight on money market funds, a U.S. Treasury Department spokeswoman said. The closed-door discussions by the Financial Stability Oversight Council about ramping up regulation for large funds comes roughly a month after the panel rolled out a framework of possible new rules for the $2.6 trillion industry. The FSOC is a council of regulators chaired by Treasury Secretary Timothy Geithner and comprised of the country's top banking and market regulators, including outgoing Securities and Exchange Commission Chairman Mary Schapiro, whose last day at the agency is Friday. The panel has broad authority to designate individual funds, sponsors or advisers as "systemically important." If large money market funds receive that designation, they would be subject to stringent supervision by the Federal Reserve and potential capital requirements.

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