August 4, 2011, 11:16 AM ET
.
Bank of New York Charging to Hold Cash, Driving New Frenzy for T-Bills
MarketBeat HOME PAGE
By Min Zeng
They say that nothing comes for free, and now that includes cash.
Bank of New York, the world’s biggest custodian bank, announced it is charging a fee of 13 basis points for unusually large cash deposits.
That has pushed money funds to move even more of their cash into already in-demand T-bills, short-term agency notes and Treasury repos.
“By forcing cash out into the marketplace, demand for money-fund investments is only going to grow, forcing investors into a pool with already incredibly shallow options,” says a money fund manager. “Most importantly, if other banks follow suit, then yield levels as a whole will have no where to go but lower as investors look to remain invested.”
Three-month T-bills recently yielded 0.008%, and short-term bills have been darting in and out of negative territory this morning.
http://blogs.wsj.com/marketbeat/2011/08/04/bank-of-new-york-charging-to-hold-cash-driving-new-frenzy-for-t-bills/
DO SOMETHING!
| 