Regulation

NEW YORK - In the wake of the ongoing credit crisis and illiquid money market, much of it due to the failure of a single money market mutual fund, the Securities and Exchange Commission plans to overhaul Rule 2-a7. Separately, the Department of the Treasury is looking into creating a market stability regulator with omniscient powers across the "entire financial system."

NEW YORK - As credit freezes up and liquidity all but vanishes, there is an enormous temptation for financial institutions and investors to hold on to their cash and brace for the worst.

New Hampshire regulators have fined a now-defunct mortgage company, First Call Mortage, in which Peter Lynch of Fidelity fame had a 13% stake, The Wall Street Journal reports. As such, Lynch faces an $85,000 fine, and First Call, $767,500.

With just $6 billion in assets left, of what once totaled $83 billion, Reserve Management is liquidating its 18 remaining funds.

The U.S. Justice Department has subpoenaed several large firms and agencies as part of an investigation to determine whether Lehman Brothers Holdings Inc. misled investors before its Sept. 15 bankruptcy filing, according to the Stamford Advocate.

Despite a stable economic outlook for the foreseeable future, many Canadians are concerned that their government isn’t doing enough to prepare itself for the kind of downturn the rest of the world is experiencing, writes the National Post.

The Federal Reserve announced Tuesday it will buy up to $1.3 trillion of the top-rated asset-backed and unsecured commercial paper in the markets—virtually a business loan bailout due to frozen money markets, the closest the government has come to making loans to businesses directly.

NEW YORK—In the wake of the ongoing credit crisis and illiquid money market, much of it due to the failure of a single money market mutual fund, the Securities and Exchange Commission plans to overhaul Rule 2a-7. Separately, the Department of the Treasury is looking into creating a market stability regulator with omniscient powers across the "entire financial system."

Investors in the now-defunct Primary Fund got their first indication of when they can expect redemptions last Monday, when Reserve Management announced it would return 32% of the fund's assets as of Sept. 15, or $20 billion, on Oct. 13.

WASHINGTON—The House reversed Monday's rejection of a bill to stabilize the financial markets approving the measure on Friday with a vote of 263 to 171.