Cash & Liquidity Management
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European Management of Money Markets Cannot Be Likened to Shadow Banking

AFTEThe leading European player in money market management, France, cannot remain indifferent to the new draft regulation released by the European Commission in early September. This draft bill on money market funds, which has yet to be submitted to the European Parliament and the Council, is one example of the interest the European Commission has taken in shadow banking in the wake of opinions issued by bodies such as the Financial Stability Board[1] and the International Organization of Securities Commissions.

This draft, thoroughly examined in France, has raised a number of questions and led to significant criticism that seem to the AFTE largely justified. One may wonder, for example, why the Commission would choose to supplant the European Securities and Markets Authority (ESMA), which published recommendations back in May 2010, at the risk of muddying the waters and discrediting its own brainchild.