Washington (AP) – Major regulators on Friday pledged to drive reforms in key corners of U.S. financial markets that the Federal Reserve had to urgently support during the spring 2020 coronavirus outbreak did.

Members of the Financial Stability Supervisory Committee discussed reforms targeting the so-called money market, including trillion dollar money market mutual funds.

The Guardian Council, an interdepartmental group led by Treasury Secretary Janet Yellen, said the 2020 crisis prompted “extreme political intervention” from the Federal Reserve and the Treasury to restore market order. It was.

Federal Reserve Board Chairman Jerome Powell, also a board member, said the 2020 crisis had urged the Federal Reserve to step into relief funding to calm the turmoil. He said it was caused by the “dash”.

“The rapid redemption of money market funds has been exacerbated by pressures on liquidity,” he told the panel.

After the Fed created the $ 10 billion money market mutual fund liquidity facility with backing from the Treasury, Powell said, “The turmoil has subsided, the short-term funding market has subsided. improved and access to credit improved. He increased. “

A private briefing from Securities and Exchange Commission staff on comments gathered by the board on reforms to be pursued to make the short-term finance market more resilient during the financial crisis. Received.

SEC chairman Gary Gensler told a public meeting that he tasked the group with preparing recommendations on which the five-member SEC could vote. Yellen said he fully supports the SEC’s efforts to reform the current system.

Council members also said the global financial system was not moving fast enough to prepare for the transition from LIBOR, the London interbank transaction rate, which is the trillion dollar benchmark interest rate for financial contracts. Concern expressed.

Regulators are supporting the transition from LIBOR rates to the Guaranteed Overnight Funding Rate (SOFR) by the end of this year.

However, Yellen and other officials have expressed concern that not enough is not being done to prepare for the transition from LIBOR to SOFR.

“We need to do more to facilitate an orderly transition,” Yellen told the panel. “We are seeing significant progress in some segments of the market, but others, including business loans, are nowhere near where they should be at this point in the transition.”