Strange days in Banksterland

[marmar]

(Bloomberg) Bank of New York Mellon Corp. (BK), the world’s largest custody bank, will charge institutional clients a fee for “extraordinarily high” cash deposits to stem a flight of capital into the safety of bank deposits.

“I’ve never seen this happen, not in 25 years,” Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine, said an interview. Other banks may follow BNY Mellon’s lead, Cassidy said.

Investors are seeking the safety of bank accounts as concern increases that the global economy may relapse into a recession and governments in the U.S. and Europe struggle with a rising debt load. A legislative stalemate last week over the U.S. debt ceiling prompted institutions to pull $103 billion from money funds in the week ended Aug. 2, the most since the bankruptcy of Lehman Brothers Holdings Inc. in September 2008.

Money market rates, which surged during the debt ceiling debate, dropped below zero percent today as Europe’s sovereign- debt crisis bolstered U.S. government securities’ appeal as the world’s safest assets. With little scope to reinvest deposits in short-term debt at a profit, banks like BNY Mellon are left with the cost of insuring the deposits with the Federal Deposit Insurance Corp. ................(more)

The complete piece is at: http://www.bloomberg.com/news/2011-08-04/bny-mellon-sets-13-basis-point-charge-on-clients-excess-cash-deposits.html

[Hydra]

1. Yeah, this is interesting

"The fee will apply to U.S. dollar deposits of more than $50 million per client, though it won’t “impact clients whose balances are consistent with prior averages,” according to a letter BNY Mellon sent to clients."

What would it be like to have $50+ million in liquid cash to play around with? I doubt I'll ever find out.

[leftstreet]

2. Holy crap. Seize their assets! Redistribute it back to the working class

What a sickening article

[readmoreoften]

3. +1