“If it looks like a duck, and quacks like a duck…”: Recognitional politics and the political economy of money market fund reform

Critics have long argued that US money market funds benefit from the best of all regulatory worlds, hiding behind securities market regulation to sell bank-like services to its customers. The ‘recognitional politics’ approach has recently been used to show how financial firms position themselves discursively as one type of entity and not another, so that they might operate in a favourable regulatory environment. Our study follows in such a vein. Throughout the 2020–2023 reform process, the MMF industry engaged in a discursive high-wire act. It demanded to be seen in general through the perspective of securities market regulators’ legibility code, but when the SEC attempted to introduce swing pricing as if MMFs were genuine securities market firms, significant industry pushback ensued. This resulted in an intricate process of discursive hopping, whereby the attempt to stifle the swing-pricing proposals involved contradicting ongoing denials that its products had cash-like characteristics at the moment of redemption. Regulatory debates about the bank-like nature of MMFs consequently remain far from settled.