SUERF - The European Money & Finance Forum’s Post

#SUERFpolicybrief “MMFs and collateralization: An opportunity financial markets should stop missing" by Cristiano Borgogna (Amundi Luxembourg SA) #MoneyMarketFunds (MMFs) are a liquidity solution for entities across the globe. #Regulatoryreforms implemented after the Global Financial Crisis rendered some of them extremely sound, non-volatile and liquid — essentially, high-quality-liquid assets. That should have made their units ideal assets for collateralization. However, this has not materialized in practice. As for their eligibility, policymakers have taken a conflicting stance, depending on whether a central counterparty is involved — a rather erratic approach. Market players are not deploying them for such purpose. Upon closer examination, the primary and most compelling reason for that appears to lie in concerns as to how their units are settled. The rise of #tokenization, by creating a new level playing field for settlement of financial instruments, may lead to re-considering such concerns, and finally open the door wide to the use of money market funds as collateral. 📄 https://lnkd.in/dH-SVbzb #FinancialMarkets