Former Chairman of the Federal Reserve Paul Volcker cracked a joke Tuesday afternoon as he was getting up to leave early from an SEC roundtable event on money market fund reform.
Volcker has been an outspoken advocate for a floating NAV for money market funds, one of the proposals on the table aimed at preventing money market funds from breaking the buck in the future, as they did in late 2008.
But Volcker joked that maybe the mutual fund industry's liquidity bank, which would provide a backstop for prime money market funds in times of severe market stress, would work, given that we've lost about 1,000 banks over the last couple years.
"This country could use another bank, so maybe it'd be a good deal!"
In all seriousness, Volcker told listeners and attendees that the bank would be subject to all the regulations of a bank holding company. He also said there's always going to be the temptation to fuss around.
"I think you're going to have more regulation than you bargained for."