 Now we move to the next paper which gives a more U.S. perspective and I see that Leigh Lee is ready from the Federal Reserve Board to present. So Leigh, the floor is yours. Thank you, Luk. And thank you, Orr, for coming here for this meeting. Thanks for having our paper on this program. Again, this is a work, joint work with E. Markle and Alex. We're always Federal Reserve Board. So the standard disclaimer applies. The views here are ours, not necessarily the view of Federal Reserve. And let me say it again. This is not our view, not Federal Reserve, since this is a pretty much a policy-related topic. And I'm hoping this paper can have some policy implications down the road. So actually the discussion after the first paper laid out are very good, almost the preludes this paper. This is again about regulation and post-regulation, the regulation of liquidity on money funds and also potentially that regulation post-financial crisis of 2008 made backfire, which became evident in 2020. So this paper is about the prime money market funds. So they are a very big player on the money markets. While they are also very vulnerable to investor rounds during the crisis, in the last 12 or 13 years, we've seen 2008 financial crisis had a money market round, 2020, again last March. Plus, in the 2011 to 2012, when the Euro debt crisis happened, you have a less severe but still a money fund round. So in the last 12, 13 years, we have two or three prices or rounds on prime money market funds. Those are very vulnerable to investor prices and investor rounds. And also they are a very important funding source for short-term borrowers like financial and non-financial firms, including banks. And also a lot of the highly rated corporates. So the SEC, the money fund regulator in the U.S. actually introduced two sets of reforms post the 2008 financial crisis with the goal of making the money funds more liquid and also less prone to rounds. That's very well consistent with the overarching theme of post-crisis regulation, try to make the financial institution capable of withstand stresses without the central bank or the government interventions. We're going to focus specifically on the 2014, the second reform post financial crisis. That became effective in October of 2016. So that reform introduced redemption gates and liquidity fees, what does that mean? So the money funds are required to have a weekly liquid assets of 30% as a percent of assets. Once their WLA or weekly liquid assets fall below the 30%, the prime fund have the option to impose gates which will suspend redemption or charge a liquidity fee up to 2% for redemption, for redemptions. And again, that's an option that's not required. The prime funds have the option of impose or not. And that feature of the reform, say in 2016, were very controversial to begin with. So then SEC Chair Mary Jill White claimed that the fee and gates that feature will mitigate the wrong risk and the potential impact for markets and for investors. On the other side, two of the SEC commissioners that time, they claim totally opposite. They claim the fee and gates could actually increase the wrong risk. There are also some debate and concerns from academic. There are a bunch of paper on that, a lot of papers actually. So why is that? Why is the wrong risk is a very big concern for money market funds? And again, I refer to the discussion by E-Ming on the open-ended capital market mutual funds or long-term mutual funds. The prime market funds have some similarity but also some difference from the wrong risk or first move advantage from the ordinary capital market bond fund or equity funds. One of the key difference between the prime funds and the ordinary, say, mutual funds is the investor or the institution investor of prime money market funds, they're extremely risk averse with respect to how much or how quickly they can get the money back. Think of you are the corporate treasurer of a company. You need the money tomorrow to pay taxes, to pay salaries or to pay your suppliers. You want the money exactly tomorrow or to be more often, sometimes they want the money within the day. They have intraday liquidity at the latest at the minimum they want the next day or daily liquidity. They would not accept, say, their investment would be suspended or they have to pay a higher fee. So the money funds are a money management tool for many corporations, for many institution investors. So this created a first move advantage in a slight different fashion from the mutual fund investors. They're not too much concerned about math, the net asset value they do, but not too much less degree. Their concern is more about the liquidity of their money. Then they get the money back the next day or within the same day. Again, here's the one possible first move advantage. Think of you as a corporate treasurer. You expect other investors in the same money funds will withdraw the money and that will drive the WA weekly liquid assets to below 30 percent threshold. Then the money fund can potentially suspend redemption for the remaining investors. You as an investor, you wouldn't accept it. That's too much. You can't take that risk. What would you do? You will probably withdraw even earlier. You will run preemptively. That's the first move advantage for the investor in money funds. And that generates a very strong incentive to run preemptively. So that's a slight difference between the money fund investors and the mutual fund investors. And what do we do in this paper? We try to use the last March, the COVID-19 shock or crisis to learn more about the debate about the gates and fees. To set up a little background, during the two weeks of last March from March 9th to 20th, the institutional priming funds lost about 30 percent of assets, AOM, to redemption, only within two weeks. We want to know, did the WA content and fee and engage play a role here? Does that liquidity regulation post financial crisis of 2008 exacerbate the run in 2020? And also, again, we have a lot of Fed interventions, including the one on the money market funds. So we would like to examine if the Fed intervention helps stop the run on money funds last March. With those two questions, here are our findings. The first one is about the fee and gates. So we find that the sensitivity of flow to fund WA increased dramatically during crisis time. And of course, the redemption accelerate by a lot as fund WA fell closer to the 30 percent threshold. We also try a lot, try a lot of tests to rule out alternative explanations. We were a lot of reverse causality. We try to rule out the floating nav and also concern about the fund liquidity and credit risk of their holdings. Lastly, in the second part of our paper, we look at the Fed intervention on money market funds. It's the money market fund liquidity facility, the MMLF. We find that the money funds, they pledge more of illiquid assets, longer term assets to the MMLF. And also funds with larger declining WA during the crisis time, they use the MMLF by more. Lastly, we hope we can say that the MMLF helps stop the money fund run in last March. All right, how do we do that? Oh, before we move on, there are also a lot of anecdotal evidence from the market. From the market commentary, it basically suggests that the 30 percent threshold introduced in 2016 was one of the key factors in the money fund run during last March. And our finding, the empirical finding is consistent with the market commentary. Okay, so our data from multiple sources to begin with, let me just clarify the sample periods. So we have a two week crisis period ends on the March 20th. Right after that, March 20th is the Friday. On the Monday, March 23rd, the MMLF started. So we use the two weeks after March 23rd as the post-MMLF period. And we use four weeks before the crisis, before March 9th, as the normal period, pre-crisis. Our data came from different sources. We have the daily data on AOM, WA, which is weekly liquid assets, and DLA, which is daily liquid assets. Another fund characteristic at weekly frequency from the iMoneyNet, which is commercial data provider. We have the SEC form NFP, which has the monthly data on the security level holding for each money funds. Lastly, we use the confidential micro data from the MMLF facility. We look at the participants, the money funds, and also the security that pledged at MMLF. To clarify a little bit, why do we say the security pledged? So the MMLF function as follows. Money funds technically sell the assets to a bank. Then the bank pledged the assets, like CP, commercial paper, or CD, to the Fed as collateral for a loan with a fixed rate and with a maturity equal, maturity and face value equal to the collateral, the CP or CD. So technically it's a pledge, collateral, but economically it's basically money funds selling assets to the Fed. All right, so the first question we'll look at is, do we have any evidence that the fund flow is a function, is sensitive to WLA during the crisis? So we look at institutional prime funds. We have a daily observation for six weeks before and during the crisis. It's a very simple model. We have the flow on the left-hand side with the crisis dummy. And we have a WLA for each fund and interaction of the crisis and WLA. We have a lot of controls. We control for almost, if not all, the known fund characteristics for money funds. And here's the results. So if you look at the first row, the crisis dummy is negative and very significant, which basically say during the crisis money funds have more outflows. Obviously, yes. The more interesting row is row number three, the interaction between WLA and crisis. It's always positive and significant. That is to say, during the crisis, relatively normal times, if you have a lower WLA, you will have higher outflows. And economic magnitude is also very big. So relatively normal times, once standard deviation decrease in WLA will be associated with additional 0.9 percentage points increasing daily outflow. So think of you have nine day or 10 days of crisis. 0.9 percentage point per day will be 9% of assets, AOM, during the entire 10 days or two weeks of crisis. It's dramatic. And also in columns three and four, we control for column two as well. We control for lag fund flows and day fix back. And also we check the parallel trends before crisis. The results are robust to all of those. That's almost the first pass. Funds with low WLA, they have more outflows during the crisis. A more interesting question would be, do we know if the outflow actually accelerates when the WLA approach falls closer to the 30% threshold? To do that, we actually split the WLA into three segments. WLA less than or equal to 40%, WLA 40 to 50, and WLA greater than 50%. Then we interact that segments, each one of them, with the crisis timing. And we rerun the regression, use the same sample. Again, here's the results. All the coefficients on the interacting term are positive and significant. But if you're starting from the very bottom, which is crisis interact with WLA greater than 50, the coefficient goes up along with the WLA declining. So it's 0.23 versus 0.31 for the WLA less than 40% interact with crisis. So as the WLA decline, as the fund get closer to the 30% threshold, regulatory threshold, the outflows became more sensitive to the WLA. Again, the economic magnitude is also pretty big for funds with WLA less than 40%. One standard deviation decrease in WLA is associated with about 2% additional daily outflow during the crisis. That's about one-third higher than additional outflow for funds with WLA greater than 50%. So it's pretty big. So now we see that the WLA or sensitivity to WLA increased during the crisis, increased with the falling of WLA, WLA falling closer to the 30%. We spent quite a lot of time trying to differentiate the story from other potential explanations. The goal is try to tie the outflow to the regulation of WLA with VN gates, the potential VN gates contingent on WLA, 30% WLA. One first and probably the most important alternative explanation is, it could be just say investor are concerned about asset illiquidity. They're concerned about how much liquid asset they can have. If I'm withdrawing from your fund, do you have the money for me today or tomorrow? Rather than concerning about the fee and gates and WLA. So to try to address this concern, we actually try to compare the fund flow sensitivity to DLA, the daily liquid assets. That's essentially the fund assets that can be converted to cash overnight, today or tomorrow. That's a very important indicator for fund liquidity condition. And again, similar to WLA, the DLA numbers are published or disclosed every day on a money-found website. So you know that as well as WLA. While thinking if you are an investor like corporate treasurer, you're concerned about the liquidity. Does the fund have enough cash for you tomorrow? Probably the most relevant measure will be the DLA. Like, does the fund have enough cash on hand or can be converted into cash tomorrow? WLA, which takes a week, again. Think of the institution you're mastering money funds, a week is forever. You wouldn't wait a week to get the money back. So if you are really, really concerning just about liquidity of your assets, the cash in hands for money funds, DLA probably be the most or more relevant measure. So the only difference between DLA and WLA is the fee and gates are contingent on WLA, 30%, not DLA. Oh, by the way, there is a DLA regulation as well, 10%. You have to maintain DLA about 10%, but there is no fee and gates tied to DLA, 10%. So what we do here is we put the DLA interaction with crisis in the model, same model, same left-hand side flow, daily flow, and we have nothing here. In the column one and two, the interaction between crisis and DLA is not significant at all. Then in column three and four, we have a horse race between DLA and WLA. We put both interaction into this regression, and we find that the crisis interact with WLA is significant and positive. And the magnitude is actually similar to the previous two tables. So in this sense, the effect of WLA on crisis time flows remains strong regardless, or after controlling for DLA, the DLA is not a key player here in the investor decision to withdraw from money funds during the crisis. Another thing we're trying to do to try to figure out the fee and gates impact is to compare in the 2020 round with the 2008 money funds round. Those two money funds rounds are actually pretty similar in terms of time span and magnitude. Both rounds last about two weeks before the intervention, and they have outflow about 30% AUM for institution prime funds. So the red line on this chart is the 2020 round is the cumulative outflow. The black dotted line dash line is for 2008. Again, that's cumulative flow since the beginning of the crisis, and it's, again, very similar to 2020. One difference between 2008 round and 2020 round is, in 2008 there's no liquidity regulation and there's no fee and gates. There's no option for fee and gates. So here we have the interaction term with WLA and crisis for the 2020 round. The funds are still sensitive, the outflow are still sensitive to WLA levels, liquidity level in general in 2008, but the coefficient in the column one and two is .02. It's much smaller, about one-fifths of the coefficient in 2020. More importantly, when we split the WLA into segments, there's no, like, increase in the sensitivity as the WLA declines. So the flow sensitivity to WLA is not stronger for funds with lower WLA in 2008. So combine the two pieces of evidence from the comparison between 2020 and 2008, and also from the comparison between WLA and DLA, we try to confirm that the outflow is actually responding to the potential that we engage by money funds, not really reacting to the liquidity condition per se. Then we try to roll out some other alternative explanations. One of them is the reverse causality. The story goes like it's not really the lower WLA or lower liquidity drives the flow, it's the flow drives the lower liquidity. So if you have a more outflow, money funds have to pay more of the cash on hands, they end up with less WLA. So the reverse causality goes from the flow to WLA. To mitigate this concern, we actually use one instrumental variable approach. We use the end of February before crisis holding of money funds. Look at their assets that will be maturing during the crisis. So those assets that maturing during the crisis will become WLA during the crisis. And that's predetermined in February before the crisis ever started. If you believe the crisis, the COVID crisis was a shock, nobody expected that or anticipated that, then this would be a good instrument. And again, at the second, the bottom panel of this table, we have the IV regression from the using maturing to instrument the WLA during the crisis. And again, the WLA is very significant on the outflow during the crisis. Then there's another feature in the 2016 money fund reform, which require all the institution prime funds to use floating nav. So before the 2016, they have a fixed $1 per share nav. Post 2016, you have to float that. So potentially the floating nav could expose an investor to more uncertainty about the net asset value could drive some flows just for the sake of argument. So we put the nav interact with crisis and also dummy of a nav below one interact with crisis. None of that, none of those actually help predicting the outflows. What's still important here in the regression is the WLA interact with crisis as always. So one possible explanation is there hasn't been a significant break in the buck event in 2020. Like we did have one in 2008, we did not have one in 2020. So the lowest nav is very close to $1. It's not technically breaking the buck. All right. We also tried several other alternatives, explanations, such as the credit quality of fun assets and also the investor sophistication level and sponsor support and also other potential factors could be driving the results on outflow. Well, for one thing, we will out them for a second. Our results on WLA interact with crisis remain all the way very robust. So it's a very robust and persistent results that fund outflows depend on the WLA levels during the crisis last year. All right. So turning to the second part of the analysis, we look at the, again, this is a central bank intervention. It's specifically our money funds. We have a good data on that. So we try to answer the question that there are actually two questions. One is who use more of the facility and what assets do they pledge? Essentially economically, that's what assets do they sell to the Federal Reserve? And also want to look at what's the effect of money funds in stopping outflows, stopping the money fund around during the crisis. So the MLF was launched on March 23rd and its usage is substantial, about $56 billion in the first two weeks of operation. That's about 8% of total assets of prime funds. So to run a regression to test, to empirically test, what are the factors in money funds decision to use the MLF facility? We go with the sample at the QCIP level. So we have a fund QCIP level data assets, the data sets with both commercial paper and NCD, the negotiable certificate deposits, in prime funds portfolio and at the end of February. We look at for each QCIP in a fund portfolio. How much percentage of that assets has been pledged or sold to the Federal Reserve after the MLF was operational? So it's our fund QCIP level data. The variable of interest on the right-hand side, we have one is locked time to maturity. That's essentially a liquidity measure. For money market, as you probably know, the term to maturity, like overnight versus one week versus one month versus three months, that will determine the liquidity. The longer the maturity, time to maturity, the more illiquid that that will be. And also we have another variable of interest which is crisis delta WA. That's the decline in WA for the fund during the crisis time. And here are the results. Look at the first row, the locked time to maturity is clear. It's very robust that for any of the money funds are very likely or more likely to sell or pledge assets that are illiquid with longer time to maturity to the MLF. And also look at the crisis delta WA. That's the declining WA during the crisis for money funds. The larger decline in the WA during the crisis, the more assets they've pledged to the MLF. So we claim that this is the evidence consistent with our prior that funds tend to pledge longer maturity assets or less illiquid assets to the Fed and found the experience with large declining liquidity during the crisis use the MLF more. Another or the follow-up question is what is the effect of the MLF on the money funds wrong or money fund outflows. There is the, this is a pretty complicated empirical question since at the time when the MLF was announced, there are a bunch of other announcements, other facilities, including the CPFF and PDCF and others. So it's empirically pretty challenging to disentangle the effect from the MLF, if any, from the effects of other policy initiatives. We try one route to tackle this. We compare the domestic U.S. domestic prime money funds, which are eligible to use the MLF versus offshore U.S. dollar-denominated prime money funds, which are mostly domiciled in Europe, but they are ineligible for the MLF. Those two type of money funds, domestic and offshore, they invest in the same type of assets, they have similar investor base, and they actually have comparable crisis time outflows. So if the money fund wrong were actually helped or stopped by the broader market improvement, we should observe a similar pattern in the flow or outflow rebounding for both offshore and domestic funds. If not, we can claim there is some impact from the domestic eligible money funds from the MLF, which only domestic funds are eligible. So here are the results. We basically regressed the daily outflow for the period during the crisis plus two weeks post-MLF, and we compare the money funds. So the MLF is a dummy for the announcement or actually operation of MLF. The domestic is a dummy for domestic funds. The MLF week one is the first week after the MLF. MLF week two is the second week after the MLF operational began. So look at the column number two. In the first week after the MLF became operational, domestic money funds experienced a big rebound in outflow. That's one percentage daily outflow, pretty big. But you don't have that thing for offshore money funds. Again, they invest in same assets and have similar type of investors. They experienced similar magnitude of outflow during the crisis. But in the very first week after the MLF was announced, where the domestic fund can access the facility, offshore funds cannot. The impact on flow is pretty much on domestic fund only. Only after the first week, in the second week, the offshore funds have a rebound up in outflows. But that outflow, the rebound is similar in magnitude to domestic. So there's no difference in the week two out the inflow for domestic versus offshore money funds. In other words, we observe that the offshore funds experienced a pretty late rebound outflow relative to domestic funds, which is consistent with the story that the MLF was helpful. They help immediately stop the flow on the domestic money funds, prime money funds. That could have been, say, a spillover or help improve the general market condition, which helped the offshore money funds in the second week. All right, to conclude. So we try to show, using the most part of this paper, that the fear of the WA contingent gates and fees that actually exacerbate investor run on money funds during the COVID crisis. We find that the sensitivity of flow to fund WA increase dramatically during the crisis and flow accelerate when the funds WA approach the 30% threshold. And we roll out a bunch of alternatives explanations. And lastly, in the second part of this paper, we show that the Fed intervention, central bank intervention, the MLF help stop the money funds run in 2020. And again, so this paper we hope can help or shift more light on the debate on the gates and potential money funds reform down the road. And again, all the views here our own, not the view of the Federal Reserve. Thank you. And I'm expecting looking forward to the discussion by marching and your comments. Thank you. And indeed, you're discussing this much in Kasperchik much in broader choice. Thank you very much for asking me to discuss this paper. It's actually very topical to the previous paper as well. And I would say I was a little bit blushing when I saw the discussion because some of the discussion that I have prepared was kind of contained in hairs. But let me just quickly review what is the interesting question here. So I think the question that is really the big picture question is the question of runs. So I think we've learned that the open and mutual funds are very much exposed to some kind of rounds. And I think the discussion is really how it is that we should be thinking about those runs and what it is that we can actually do to stop the runs. So, so just to repeat what roughly speaking, I mean, has said in her discussion, it's useful to kind of review what is this run mechanism. So I think it's very much related to two aspects of the kind of pricing. One is how mutual fund investors are getting prices in the way how they transact, which is generally the price that redeeming investors get is some kind of price within the day when they ask to withdraw. And then the second aspect of this issue is basically the liquidity of the portfolio. So, so the general underlying problem of this run mechanics is this, if I cannot secure that my transacting prices at which I'm going to sell the assets as a fund manager. I'm going to actually match the prices that I'm going to guarantee to the investor who withdraws, but rather they are going to be actually lower. There is going to be this first mover advantage and anyone who is not planning to withdraw ex ante is going to internalize this and it's also going to try to withdraw as well. So this is what we call the strategic complementarity in this literature. And of course, the problem is exacerbated the more in liquid this assets are and potentially the less patient the investors are who needs to withdraw. So both of these features could actually potentially fit in very well within the setting of money market funds. So then the question is, of course, how is it that we can kind of mitigate this problem. So we have many ways to think about it. One is to impose some kind of redemption gates on everyone. So you are not going to be allowed to withdraw this money when you want to, but you can also think about some kind of liquidity fees. So you want to incentivize funds to actually keep the liquid assets high. So presumably that would actually help stop the runs. And finally, the ultimate always solution is the government. So you can introduce some kind of bailout and that could potentially stop the run as well. So what's interesting is that some of these tools that we kind of think of as hedging potentially could in fact create these unintended consequences and they could actually exacerbate the problem of runs. And this is what this paper in a nutshell is about is trying to understand what it is that is happening in terms of how we should be thinking about the liquidity buffers and the redemption gates around the US money market fund, the mutual funds, the money funds. And what's the story there. The story is that funds have actually a discretion following the reform in 2014 that was implemented in 2016 to actually introduce some sorts of redemption gates and potential liquidity fees in the instance when the weekly liquid assets of the portfolio dropped below a certain threshold, which within the US regulation is 30%. So if the investors observe that this liquid assets start converging closer and closer towards this 30% level for it that actually people withdrawing money can actually push that liquid assets below that threshold. And then ultimately this are going to be creating some stops on their ability to withdraw. So that's what generates this kind of strategic complementarity here. And again as I said, ultimately the government has always the power to stop the run altogether. So I have a I think it first of all this is a very interesting paper and I think it has a lot of results so in the interest of time I'm not going to review those I think ladies a great job summarizing them. Instead I wanted to kind of highlight a couple of areas which I think are potentially useful and interesting for for this paper so. So the first one is this issue of strategic complementarities. I think generally speaking when we think about strategic complementarities, we are thinking of some kind of transfer of wealth between some investors that we call impatient and those that we call a patient. So think for example of a context of a swing pricing or some kind of fees that are being imposed on impatient investors. That's usually what we have in mind when we actually talk about strategic complementarities. But here what's a little bit different and maybe that's one suggestion to be careful about this word of strategic complementarities is that both patient and impatient investors are going to be hurt because neither of them is going to be actually allowed to transact. And if you think about that that in some sense is a cost on everyone and it's not obvious who is really benefiting whom and who is actually paying the price for that. And more so I think from the kind of general equilibrium perspective what I think it's interesting and useful is that the fees and gates that you are going to impose especially are going to presumably actually lead to less price discovery. So unlike in some other structures where you basically do not close the fund but you actually allow it to trade but you just redistribute the value within the fund portfolio. Here there is actually going to be a cost that is paid by everyone because we are going to understand less what's the fundamental value of the assets that we are trading. So in this regard I think it's it's not even obvious ex ante that this redemption gates are actually a good policy tool to begin with. So while I appreciate that we are studying them here in the context of the reform. I would probably argue even more forcefully than the people that you have cited and said that it's not obvious why I would even put this redemption gates in the first place so so maybe some kind of discussion of that would be actually useful. In a moment then it's also related to this conceptual framework is this interaction idea between the weighted liquid weekly liquid assets and the redemption gates. So the paper is a little bit kind of switching between one and the other interpretation which is one is the interpretation in which actually liquidity does not matter. I was talking about this idea of a daily liquid assets as not actually significantly affecting the flows, but at the same time we are talking about this threshold in a sense that that are actually important here which are related to liquidity. So, so I think one has to be a little bit carefully how to interpret this results. So the first kind of observations from the results I see, and this is my slightly different interpretation then lays is it is that if we look at what really affects the flows into this money market funds. This is really the first order effect. In a sense, if you look at the magnitude of the effects in the table that they have shown the as a result of the crisis dummy the daily flows were dropping by around eight to nine percent. But then one standard deviation increase or improvement in the weekly liquidity assets was just bringing this up by roughly one tenth of that, which was point nine percentage points. In the language of lay he says this is a large economic effect to me that sounds more like a second order effect. It's an order of magnitude smaller effect than that you get basically from just the crisis itself. So just to contrast it for you if you look for example it's something like a swing pricing idea. The moment the funds actually introduce swing pricing during the crisis period that actually undoes any kind of withdrawals. So these are like are actually mitigating these things in an enormous way. And then the second thing that I think it's important to realize is this notion of nonlinearity. So the paper kind of relies a lot on this nonlinearity. And again, when you look at the results it seems to be the case that this undoing effect happens pretty much in any bucket of the weekly liquid assets. I understand that there is a little bit of a magnitude increase as you come closer to the 30% threshold, but at the very least, it seems to me that they, these differences are not very large. So one suggestion that I think would be useful at least from the statistical point of view to actually show the statistical test of differences across this coefficients because casually eyeballing them it doesn't almost feel like they're actually different from each one. So where does it bring me to it brings me to the idea that really what could matter is really something that is about these redemptions and it's not so much about liquidity because if this threshold in some sense are irrelevant. Clearly investors are not really worried about where the liquidity is going to be, but it's where the redemptions are going to be. And in some sense, this is where I think the paper should put a little bit more a kind of discussion of what are these redemptions about how is it that they are implemented, etc. And also from the more broader perspective one aspect in the paper which was a little bit less discussed is what's the effect of all of this on fund managers. I understand that from the perspective of understanding the run we want to actually understand what is the behavior of funding investors because ultimately they are the ones who are a kind of generating the runs. I think what's interesting in that story is that is the question, are managers really silent around this time. I mean, it's clearly not in the manager interest either to observe the run because it can actually lead to the liquidation of the fund. So the question is, why is it that they actually are not doing anything to actually reach these levels. And in particular, a very simple question is, why is it that they are not trying to kind of change the WLA. If I know that this threshold to 30% is a sensitive threshold for investors. Exante I could build the buffers such that this WLA is are actually high enough so that I never actually come closer to this particular threshold. And in the context of money market funds, this is particularly interesting because the margins that you generate in terms of returns are not very large. So really observationally it's not going to make a huge difference in terms of losing some kind of performance benefit of the liquidity loss. This is very different than for example in the bond fund context that Maria was talking about. So, so unless you convince me there is some kind of strong sensitivity of investors close to performance differences and that correlates with this WLA. I think the simple strategy for the fund manager should be actually to keep this WLA is high. So I would encourage you to explore that aspect and understand why is it that they are not doing that what is the incentive for them to actually even come closer to that particular threshold. So the second comment is the comment about the reform itself so in the way how the reform is structured and lay was very clear about it. It's actually not a mandate to actually impose their fees and the redemption gates. It's just basically a discretion that the funds have to do so. And as with anything that is of course an interesting question of ex ante versus exposed ex ante of course there is a risk that the fund is going to do it. The question is how credible that risk is in a competitive market in which imposing this actually redemption gates could be potentially costly to a fund. It's not really in the interest of the fund manager to do it. So the question is do we actually observe that the funds ever do it. So I would like to see some analysis of that whether there is any kind of evidence that this has ever happened and what was the kind of implication of that. And in this way maybe there is another and better way to kind of understand the intersectional variation across funds in terms of the incidence of using such tools. So anything you could bring in in terms of the ex ante probabilities of how likely these tools are going to be actually imposed. I think it would be very helpful to understand the behavior of investors in the context of this particular reform. And the final comment I have is a little bit of a suggestion. I feel that the paper is about two papers. Okay, so in a sense the first part of the paper that I have just discussed seems to me a little bit disjoint from the second part of the paper which is the idea of of the facilities. I think it's interesting and Marie and coaches have a very nice paper as well on that. But I think if you want to kind of push this idea a little bit deeper. I think my best suggestion I can offer is that I would actually split the paper into two papers and try to understand this question in a separate kind of issue. Otherwise, it's not clear how I should be connecting the two kind of results to each other. So this is just a little comment in the passing. So just to conclude, I was clearly on an important and interesting topic. I think we need to understand how this runs for her arms form, what are the kind of tools that we can use to actually mitigate them. And, and I think it provides a lot of evidence that helps us understand what works and what doesn't work. As I said in my comments, I would welcome a little bit more clarification and maybe discussion of the conceptual framework, a little bit the analysis of x anti versus exposed risk of imposing some of this costs that you discussing the reform would be also helpful. And finally, as I said, unless you give me a good reason to think why the facilities kind of are the natural way to think about the first part of the paper. I would suggest that you actually delegate this to another paper because I think the question is interesting, but it kind of deserves a separate space outside of this specific paper. Thank you so much. Thank you, Martin. So we've run out of time for the session, but we can take a few minutes. I understand. So, lay first back to you. Could you respond maybe take a minute to respond to Martin's main content would particularly be interested in your reply to his view that these WLA cutoffs. Or maybe the analysis is sensitive to those and even that it is all about redemption fees are rather than the WLA cutoff. Put your comments on that or anything else you want, please. Oh, thanks. Thanks, marching and the first floor. Thank you very much. And if you can send us your slide that'll be very helpful. In the interest of time. Okay, I've. Okay. We actually run the statistical test of the difference in interaction of WLA interact the crisis with w a segment the difference between them are significant. And also, would try to get back to the more of the big picture question in terms in interest of time. Again, let me say, this is not a review of Federal Reserve. This is my personal view. What the manager believe? Why don't they have WLA well above the 30% threshold to just to avoid the possible concern of WLA or the Lofian Gates. One reason is prime institution funds before crisis. They do care a little bit about an yield. One or two basis point difference in their yield will generate a huge difference in EOM. So it's a trillion dollar market. Any one basis point difference will generate a big difference EOM and also fees for the management company. Another one, my speculation again, since many managers when they have WLA below certain threshold during the crisis like the March 2020, it's an exotic shock. They probably fact in some government intervention, some bailout. If they can keep WLA reasonably well with one basis point, two basis point yield, they attract a lot of money before crisis. If there's something like systematic as in the last March, they expect government will bail them out like in 2008 in 2020. So manager have fund manager have that incentive. Again, I'm speaking not a Federal Reserve of myself. No, actually not a single fund imposed in the gates. There's only one fund at WLA below 30% 27% during the crisis. That one fund was liquidated in July of last year. So we cannot run the statistical test of the what happened if the fee and gates were broken. We just don't have the example. It's more about the fear of imposing, not the actual imposing theater gates during the crisis that drive the flow. Talking a little bit about, so one last thing I want to stress again is the first move advantage for money from the investor is slightly different from the first move advantage for the mutual funds. They care about NAF, especially during normal times, but not a lot. So one basis point is a lot for some investor during normal time, but not a lot during crisis. They care about if they can get the money tomorrow or today within a few hours. So the fee and gate, the locking is a bigger concern than that. So the first move advantage goes through the fee and gates or the redemption suspension rather than from the NAF for money from the investors. Again, I agree with you. The ex Annie is the fee and gates is a good policy option back in 2016 or 2014. I don't know it's they're concerned about it. We are we're not trying to get this theoretical debate in this paper. But at a personal level, I don't think that's a good idea. And again, my personal view, not of the Federal Reserve. I'm sorry for saying that so many times. I understand the pressure on the head and upwards. And so I think that was all very clear. Thanks for that. And indeed, I saw those significant tests to you put them in there. I don't have any questions from the floor and we are a few minutes over time. So, so thanks so much. Again, and also Martin for the great discussion. So we take a few minutes break and then Florian will take over to chair the next session. So I understand we can have a slightly shorter three minute break. So see you back in three minutes. Bye now.