Brussels, 22/08/2013 (Agence Europe) - EU Internal Market Commissioner Michel Barnier will unveil draft legislation on money market funds on Wednesday 4 September.
There are a lot of money market funds in France and Ireland, where they are used as shadow banking by investors although they are not subject to the prudential capital and liquidity rules of the banks, explain people close to the Commissioner. The idea is not to force the funds to meet the same rules as the banks, but rather to ensure that they are able to cope with any financial crisis in the future.
Last summer, the Commission organised a consultation on the potential dangers for financial stability of portfolio management techniques such as lending shares to other parties and pensioning them off, techniques used by money market funds.
The new legislation will be unveiled the day before the G20 Summit in St Petersburg. They are part of the global drive to shed light on shadow banking, the unregulated parallel banking system that accounts for more than a quarter of the world's financial system (see EUROPE 10577).
Future legislation. On 18 September, the Commission will unveil draft legislation on the management of financial benchmarks following the scandal of the fiddling of the Libor inter-bank exchange rate index. In October, the Commission will publish its vision of the way banking is organised, in the light of the recommendations of the Liikanen Group. (MB/transl.fl)