Good citizen BNY Mellon assists clients
US-based institution Bank of New York Mellon (BNY Mellon) has sought to provide clients and investors with some breathing room by offering support to those invested in money market mutual funds, cash sweep funds and similar collective funds impacted by the bankruptcy filing of investment bank Lehman Brothers.
BNY Mellon said it would be issuing support agreements related to five commingled cash funds used primarily for overnight custody cash sweeps and one fund used for the reinvestment of cash collateral within the company’s securities lending business.
The institution said it expected to incur an after-tax charge of around $425 million in the third quarter, which would include additional costs associated with a previously disclosed capital support agreement that were outstanding at the end of the second quarter.
Commenting on the move, BNY Mellon chairman and chief executive Robert P. Kelly said the actions would provide support to the company’s clients and hopefully contribute to greater stability in the overall market.
“We have helped clients navigate through all market conditions for more than 200 years and we have the financial strength to support them now in the face of unprecedented market turmoil,” he said. “While we are disappointed that the cost of these actions will impact our quarterly results, we feel this is an important investment in our client relationships.”
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