ABSTRACT
The importance of money market funds in the US and Europe emerged during the financial crisis, with new regulations aimed at changing the industry structure world-wide proposed in 2012 and, after a number of revisions, re-proposed in 2016. The ability of these funds to transmit funding risk drew the attention of regulators and academic researchers. This chapter focuses on European money market funds defined by the guidelines on a common definition of European money market funds, which came into effect in May 2011, and are currently administered by the European Securities and Markets Authorities. It examines the harmonization initiatives with respect to European money market funds. The chapter offers a critical view of these initiatives on the grounds of their limited benefits to the local investment communities and general concerns related to aggregation of systemic risk.
