Unlike his predecessor, Paul Volcker, the current chairman of the Federal Reserve doesn’t believe money market funds should be regulated like banks, with reserve requirements and mandatory insurance.

However, Ben Bernanke does believe they should have some insurance and be subject to such investment restrictions as only buying short-term, liquid securities.

“He’s being more measured in his remarks,” Joan Swirsky, an attorney with Stradley Ronon Stevens & Young, told Bloomberg. “He’s not throwing out the baby with the bathwater.”

The Investment Company Institute has said that if strict restrictions were imposed on money market funds, it could potentially kill the industry. The ICI welcomed Bernanke’s more measured approach and acknowledged some reforms were necessary.

“We agree with Chairman Bernanke that money market funds play a crucial role in the U.S. economy and appreciate his comments on the need to increase the resiliency of the money markets, generally, and money market funds, in particular,” said ICI spokesman Gregory Ahern.

The ICI’s working group on money market funds, headed by Vanguard Chairman John Brennan, is scheduled to deliver its findings by the end of the month.

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