Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Craig Siegenthaler – Credit Suisse.
Craig Siegenthaler – Credit Suisse
I just wanted your thoughts on the money market industry net flows because if you look at the data, it looks like we hit a peak in the fourth quarter and what I'm wondering is if this is just the normal cyclical pattern of down money market assets for a year or two, do you think Federated can continue to take market share there and actually deliver net inflows in that business despite negative flows for the industry?
Christopher Donahue
I think we can continue to grow market share and the reason is because of the consolidation that we're seeing and people who are throwing in the towel and actually running small type of money funds. And that comment would apply regardless of the cycle of overall movement of cash in and about the marketplace.
Craig Siegenthaler – Credit Suisse
My second question on the money market fund business really relates to capital charges. You just commented on the government's recent comments and the working group, I'm wondering when the insurance wrapper goes away this fall how you frame that risk of capital charges now in light of this decision. And also, if there's a rise in corporate banker fees which could impact some CP programs this summer. I'm wondering if you think that could impact anything.
Christopher Donahue
In terms of the capital charges, it's our view and the ICI working groups' view that the market place should be in a good enough position to enable that insurance to lapse, and that we go back to the way we had successfully run money funds for 35 plus years.
I think you've seen a number of funds already move in that direction primarily the Treasury funds as many of the large operators including ourselves, have decided to shed that insurance at the recent time frame when you had to re-up. So you're seeing a lot of things in the market place that give you some confidence that those fees are going to correct as well. So that's our view on the insurance.
In terms of capital charges, once again we think those are both unnecessary and unwarranted in this business. Our idea is to focus on the confidence of credit worth and knowledge of your customer and all of the other things that the ICI put together in order to as Bernanke calls it, enhance the resiliency of money funds.
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