With the SEC's proposed changes in money market fund regulation likely to go into effect mid-2014, banks should be taking a closer look now at the possible impact of, and opportunities related to, this expected reform. While there's often a conservative tendency for banks to forgo preemptive action in preference for a wait-and-see approach, the proposed changes to MMF rules may provide a window of opportunity to benefit from enhancing institutional cash management offerings.
Our business at Bank Performance Strategies is to revitalize retail-time deposits, and with the abundance of liquidity in recent years, we've faced some headwinds in the demand for our services. Now, just as we are experiencing tapering of quantitative easing and new industry headlines trumpet the value of deposits, the SEC may be handing the deposit industry a fresh opportunity to secure more low-cost, short-term deposits. While this isn't great news for our work in retail-time deposits, we recognize that for many of our banking clients a new flood of liquidity could present a vital resource given the growing concerns over eventually rising interest rates.
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