What is meant by credit quality, and what does the report recommend on the matter?
Credit quality refers to the amount of credit risk in a security held by the portfolio. In particular, credit risk for a bond issuer means the possibility that the issuer may not be able to pay interest and repay its debt. The report recommends requiring money market funds to establish a “new products” or similar committee to review and approve new investment structures before the fund invests in them. It also encourages money market funds and their advisers to follow best practices for determining minimal credit risks.
