U.S. Chamber Applauds End of Treasury's Guarantee Program for Money Market Funds

Calls Announcement Timely Exit Strategy From Government Intervention

WASHINGTON, D.C.— The U.S. Chamber's Center for Capital Markets Competitiveness (CCMC) today applauded the U.S. Department of the Treasury's announcement to end its Guarantee Program for Money Market Funds. The program was established in September 2008 to shore up investor confidence in the industry during the severe market disruptions.

"Treasury's program served its purpose to stabilize the industry and paid off for U.S. taxpayers to the tune of $1.2 billion," said David Hirschmann, president and CEO of the CCMC. "As the global economy continues to recover, Treasury's move signals what we hope will be timely and appropriate exit strategies from other emergency programs established by the U.S. government."

The $3.4 billion money market fund industry plays a critical role in our marketplace by serving as a fundamental source of short-term financing for American businesses and state and local governments. This role in capital formation has proven to be particularly crucial during the recent disruptions in our credit markets. Money market funds also offer investors unique access to strong and safe investment opportunities in the money market.

CCMC has applauded the industry and the SEC for proposing rule changes to ensure the longer-term resiliency of money market funds. "We remain concerned that certain aspects of the SEC's proposal could unnecessarily limit this important role in our capital markets," said Hirschmann. "As the SEC works to finalize these changes, we continue to urge it to preserve the ability of money market funds to invest up to 5% of total assets in second tier securities. We also agree with the SEC in its decision to maintain the stable value NAV for money market funds and retain the dollar-in, dollar-out assurance for investors."

For a copy of the Chamber's September 3, 2009 joint comment letter with 20 companies on the SEC's money market proposal please visit: www.uschamber.com/issues/comments

The Center's comments on the SEC's rule proposal can be found here.

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

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