Posted on 08/04/2011 6:23:01 PM PDT by Nachum
(Reuters) - Bank of New York Mellon Corp told some of its biggest depositors this week it does not want their money.
BNY Mellon said it is charging a fee to big corporate and asset management clients that deposit more money than average, because it has been overwhelmed by deposits.
Global economic turmoil -- including the Greek debt crisis and the U.S. debt ceiling debate -- has driven BNY Mellon's large clients to sell riskier assets and move the proceeds to deposit accounts.
The flood of cash is likely to raise BNY Mellon's U.S. deposit insurance fees and could weaken capital ratios, which are partly based on liabilities such as deposits.
BNY Mellon said in a letter to clients that the big increase in deposits is likely "transient," meaning the funds cannot be invested.
"Past history shows that once the storm passes, these deposits quickly return to the markets," its letter said.
(Excerpt) Read more at reuters.com ...
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Wow, instead of the bank giving you interest now for free use of your cash, they are charging you to deposit it.
The have all of the cash they need from the bailout. They don’t need any more. :)
I think this may put this past week’s market action, and especially today’s action, into a new light.
Note this, in particular:
BNY Mellon said in a letter to clients that the big increase in deposits is likely “transient,” meaning the funds cannot be invested.
“Past history shows that once the storm passes, these deposits quickly return to the markets,” its letter said.
The world’s capital is on strike.
No one is getting any kind of return to their liking, so they’re waiting for the game to change.
One knows the world is upside down when banks view deposits as liabilities.
Don’t forget that the big banks are also earning interest on those essentially free T-bill they got from TARP.
Here’s one for the books.
Despite the best efforts of Premier Hussein, it’s still a free market, with plenty of banks available.
BNY Mellon is only charging this for larger corporate clients -- probably guys putting in Million$$
Yes, and you know something really ugly is coming by such financial perversion.
It tells me cash is becoming more worthless by the day.
I can hardly wait for the signs outside the banks. "This bank does not accept cash. Bring us something of tangible value."
Bank does not want money. Up is down. Flying pig.
10s of billions is more likely.
you are correct
Banks have always viewed cash deposits as liabilities because they are.
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