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This paper seeks to describe the recent SEC Roundtable on Money Market Funds and Systemic Risk and the context behind the roundtable.

The paper discusses the SEC's roundtable on money market funds. Context to the roundtable is provided by describing recent steps taken by regulators to address risks posed by money funds. The paper also examines the principal topics discussed at the roundtable, including the debate on the systemic risks posed by money funds and potential regulatory changes that could mitigate those risks.

A number of regulatory proposals that were raised at the roundtable could, if adopted by the SEC, significantly alter the operation of money market funds as we know them, including requiring money market funds to institute market‐based net asset value (“NAV”) instead of stable NAV, be subject to banking regulations, create an industry‐funded private liquidity bank, or maintain liquidity reserve requirements.

The roundtable is significant as it is likely to influence the future discussion of the regulation of money market funds, which has potential implications for both the money management industry and entities financed by money market funds.

The paper provides information on money market reform for investment advisers, broker‐dealers, regulatory lawyers, institutional investors, and investment companies.

This study compares the effectiveness of money market hedges and options hedges for both payables and receivables denominated in British pounds, German marks, Japanese yen and the Swiss franc. Data on interest rates, exchange rates, and options contracts were obtained from public sources for two recent time periods. This information was used to determine, for each currency: 1) the lowest rate of exchange for payables, and 2) the highest rate of exchange for receivables for each hedging technique. Unique “money market hedge exchange rate factors” and “options hedge exchange rate factors” were developed to facilitate comparisons between the two hedging techniques.

Allyn Young′s lectures, as recorded by the young Nicholas Kaldor, survey the historical roots of the subject from Aristotle through to the modern neo‐classical writers. The focus throughout is on the conditions making for economic progress, with stress on the institutional developments that extend and are extended by the size of the market. Organisational changes that promote the division of labour and specialisation within and between firms and industries, and which promote competition and mobility, are seen as the vital factors in growth. In the absence of new markets, inventions as such play only a minor role. The economic system is an inter‐related whole, or a living “organon”. It is from this perspective that micro‐economic relations are analysed, and this helps expose certain fallacies of composition associated with the marginal productivity theory of production and distribution. Factors are paid not because they are productive but because they are scarce. Likewise he shows why Marshallian supply and demand schedules, based on the “one thing at a time” approach, cannot adequately describe the dynamic growth properties of the system. Supply and demand cannot be simply integrated to arrive at a picture of the whole economy. These notes are complemented by eleven articles in the Encyclopaedia Britannica which were published shortly after Young′s sudden death in 1929.

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

The purpose of this paper is to empirically analyze the transmission mechanism between benchmark interest rate of financial market, money market interest rate and capital market yields in order to reveal the dynamic evolution characters and core influential structure between different market interest rates.

Using Dirichlet-VAR (DVAR) model, this study analyze the relationship between markets rates according to the equilibrium model in money market and capital market.

Empirical results show that the interest rate transmission mechanism functions smoothly between interest rates of different levels. Interest rate of bills issued by the central bank can effectively reflect changes in monetary policy and guide the fluidity of market, playing the anchor role in interest rate pricing. There exists a closed loop feedback between interest rate of bills issued by the central bank, and money market interest rate, as well as between money market interest rate and bond market interest rate. The former is a loop by administrative means while the latter is the one mainly affected by market-oriented means. The response by money market and bond market toward the change of benchmark interest rate is unsymmetrical as money market is more sensitive to a loose monetary policy while bond market is more sensitive to a tight monetary policy. Stock market is strongly affected by uncertainty of benchmark interest rate.

DVAR model is the extension of research on instable data and multiple variable causality test, which expands the causality analysis between two variables to multiple variables causality impact analysis which contains non-stable and structurally instable economic data.

This paper aims to examine the information content of mutual fund flows and its indication on investors’ preference/tolerance toward risk.

Mutual funds are grouped into different categories based on assets with different levels of risk perceptions (e.g. equity fund, money market fund), and this information is publicly accessible. This paper examines the correlation patterns between fund flows and changes in credit default swaps (CDS) spreads. In addition, it also examines such a relation by dividing the samples into different fund types (e.g. retail vs institutional fund flows).

This paper suggests that equity fund flows are negatively related to CDS spreads, whereas money market fund flows are positively related to CDS spreads. Furthermore, it indicates that retail fund flows provide insightful information and serve as the primary driver behind the relation between fund flows and CDS spreads.

The findings of this paper indicate that flows into equity and money market funds could serve as a risk sentiment in credit markets. And this is the first study, to the best of the author’s knowledge, to establish such a linkage between fund flows and CDS spreads to help investors gauge credit market sentiment.

The development of blockchain and cryptocurrency may alleviate the economic strain associated with recession. Economic recessions tend to be aggregate-demand driven, meaning that they are caused by fluctuations in the supply of or demand for money. Holding monetary policy as solution assumes that stability must arise from outside of the economic system. Under a policy regime that allows innovations in blockchain to develop, blockchain technology may promote a money supply that is responsive to changes in demand to hold money. The purpose of this paper is to suggest that cryptocurrencies present an opportunity to profitably implement rules that promote macroeconomic stability. In particular, cryptocurrency that is asset-backed may provide a means for cheaply attaining liquidity during a crisis.

The role of cryptocurrency in promoting macroeconomic equilibrium is approached through the lens of monetary theory. Moves away from macroeconomic equilibrium necessitate either a change in the average price of money or a change in the quantity of money, or a change in portfolio demand for money. Cryptocurrency promotes an increase, however this requires the alignment of policy regulating the use of cryptocurrency, reduction in taxes placed on the use of cryptocurrency and cryptocurrency protocol.

Cryptocurrency is unlikely to become legal tender, but it may alleviate macroeconomic fluctuations as a near money that provides liquidity and whose supply is sensitive to changes in demand to hold money and money-like substitutes. This role might be inhibited if policy stifles the development of cryptocurrencies and blockchain technology.

New financial innovations like cryptocurrencies can be analyzed applying the equation of exchange in light of the mechanics of money creation under conditions of disequilibrium. Monetary disequilibrium may be promoted by policy that causes bottlenecks in financial markets.

Theory of monetary disequilibrium has broad implications for the development and regulation of financial markets. This theory has not been applied to the development of cryptocurrency markets.

To introduce new initiatives in combating money laundering and related corruption in the capital market sector through international cooperation between Indonesia and Australia.

This study used qualitative research methods. Data were obtained through observation, interviews and secondary data analysis. Primary and secondary data were then analyzed with an interactive model.

The Indonesian capital market is at high risk of being used as a means of laundering corrupt money. Our analysis found a major obstacle when investigators and prosecutors have handled money laundering cases conducted in the capital market because they have not had enough knowledge related to the capital market and its business processes.

This article is expected to add to the literature on handling money laundering from corruption carried out in the capital market. It describes best-practice efforts undertaken by Indonesia and Australia.

This paper seeks to examine the operation of an Islamic inter‐bank money market (IIMM), within a dual banking system.

The paper describes Malaysia's Islamic IIMM. It then examines some of the key risks associated with money market functions. An empirical examination of the extent to which yields in the IIMM are correlated with conventional money market yields is undertaken. The implication of this on interest‐rate exposure for the Islamic financial sector is discussed. Finally, the paper looks at some of the challenges and offers conclusions.

The paper argues that even though an Islamic money market operates in an interest‐free environment and trades Shariah‐compliant instruments, many of the risks associated with conventional money markets, including interest‐rate risks are relevant. The empirical evidence, based on Malaysian data, points to Islamic money market profit rates/yields that are highly correlated and move in tandem with conventional money market rates. Given the dynamics of fund flows and cross‐linkages, an IIMM operating within a dual banking system cannot sterilize itself from interest‐rate risks. In fact, the paper argues that such an IIMM may actually enhance interest‐rate risk transmission to the Islamic banking sector, by providing additional channels of transmission. Ironical as it may be, the operations of an IIMM in a dual banking system may serve to bring the Islamic banking sector into closer orbit with the conventional sector.

The paper offers insights into the IIMM, focusing on Malaysia.

The purpose of this paper is to examine information and volatility linkages among real estate, equity, bond and money markets in Australia.

A novel rational expectations framework of financial contagion (Kodres and Pritsker, 2002), along with a combination of robust statistical methods including simple and dynamic correlations and generalized impulse response (Fereidouni et al., 2014) have been employed using data covering three dynamic pre-pandemic economic cycles, namely, global financial crisis (GFC) period, pre-pandemic housing boom and pre-pandemic housing downturn from 2008 (February) to 2019 (December).

Results reveal information linkages across real estate, equity, bond and money markets through correlations in return and volatilities of these series. Finding indicates that the three financial markets (equity, bond and money markets) are interdependent and integrated through information and volatility linkages during the GFC period and pre-pandemic housing downturn period. Financial markets have stronger associations with real estate market during pre-pandemic housing boom. The findings contribute to the general notion that the performances of three financial markets are closely related to the “boom” phase of the real estate cycle.

This research provides an extension of existing literature regarding the information and volatility contagion of the expanded set of core investment markets in Australia. The findings could assist household buyers and investors in designing strategic investment portfolios/hedging strategies and minimizing asset specific risks through diversification over short-term and long-term. In addition, results could support the maintenance, growth and development of a combination of competitive balanced investment markets including real estate, equity, bond and money markets in post-pandemic economy.