Money Market Fund Reform Is Nigh; Spot the Hidden Payments Stories!

Breaking News This Morning ...

Earnings: Bank of America, Bank of New York Mellon, Huntington, PNC

Receiving Wide Coverage ...

Money Market Funds: New regulations for them are on the way. An SEC spokesman tells the Times that the regulator's staff "expects to have something for the commission's consideration in the near future." BlackRock's Larry Fink told investors he anticipates "some sort of" floating net asset value to be imposed on prime funds (money market funds that buy short-term corporate debt, rather than just government paper). Thank (or blame) the Financial Stability Oversight Council for leaning on the SEC after former chairman Mary Schapiro scrapped a reform plan opposed by three of the five commissioners. Wall Street Journal, New York Times

Wall Street Journal

Here's a good old-fashioned, meat-and-potatoes corporate payments story. Big companies are stretching out the time they take to pay suppliers. It's "aggressive cash management. …a means of freeing up money to fund expansions, buy back stock and support dividend payouts at a time of lackluster sales growth and shrinking profit margins." Rather than paying a $10 million invoice in 45 days, for example, a manufacturer might now take 75 days. Painful for the suppliers … but here come bankers to the rescue. Instead of making the supplier wait, a bank like Citi or JPM can pay the bill in as soon as 15 days — minus a fee, naturally — and collect the full receivable when it's due. "Low interest rates make the service more affordable. Banks now charge annual rates as low as 1.3% to buy receivables with creditworthy customers." Wal-Mart, Unilever and Kohl's are among the corporations that offer such financing through their banks, and Procter & Gamble is planning to do so, according to the article.

And here's a consumer payments story, hidden inside a fluctuating-asset story. Headline: "Bitcoin Investors Hang On for the Ride." The important part: "Bitcoin payments are becoming increasingly popular among Internet merchants, who want to reduce costs associated with accepting credit cards…."

Similarly, scroll down to the second-to-last paragraph of the "Ahead of the Tape" column for a refresher on PayPal's importance to eBay.

Financial Times

To prevent further manipulation, Libor and other indexes of interbank borrowing costs should give more weight to actual transactions than estimates, an International Organisation of Securities Commissions task force said.

"Push to cut trade finance from Basel III" — The push comes from the International Chamber of Commerce, which argues short-term export-related credit (another bread-and-butter banking line) is being "unfairly penalized" by the new capital standard.