Volcker warns on mutual funds

BOSTON: Paul Volcker, the former Federal Reserve chairman who is an adviser to President Barack Obama, said money-market mutual funds undermine the strength of the US financial system and should be regulated more like banks.

"Banks remain the functioning heart of the financial system, and they are protected and regulated," Volcker said.

"To the extent they have competitors that have different ground rules, kind of free-riders in my view, weakens the financial system."