posted on Feb, 12 2009 @ 12:45 AM
Jesse's Café Américain
"Poverty wants much, but greed wants everything." Publilius Syrus, 1st century BC
18 September 2008
A Run on Money Market Deposits Takes Down Two More Funds
BNY Mellon Institutional Cash Fund Hit by Lehman Debt Losses
By Christopher Condon
Sept. 18 (Bloomberg) -- An institutional fund run by Bank of New York Mellon Corp. designed to work like a money-market account fell to less than $1 a
share after losses on debt issued by bankrupt Lehman Brothers Holdings Inc.
The $22 billion BNY Institutional Cash Reserves fell to $0.991 a share on Sept. 16, according to an e-mail sent by a bank representative to one
client. BNY Mellon has ``isolated the Lehman assets in the fund into a separate structure,'' Ivan Royle, a spokesman for the New York-based company,
said today in an e-mailed statement.
The fund invests cash deposited as collateral by clients who borrow securities from BNY Mellon, the world's largest custody bank. Lehman debt
represented 1.13 percent of the fund's holdings, according to the statement. Royle declined in an interview to say whether investors withdrawing
money from the fund would realize losses. The BNY Mellon fund, while not a registered money-market fund, is ``generally managed to be compliant with
the investment-related provisions of'' U.S. law governing the accounts, according to a bank brochure.
Reserve Primary Fund, the oldest U.S. money-market fund, on Sept. 16 became the first in 14 years to fall below the $1 a share price, known as
``breaking the buck.'' Investors pulled 60 percent of their money from the $62.6 billion fund on Sept. 15 and 16 before withdrawals were delayed. "
[edit on 12-2-2009 by burntheships]