
- JPMorgan Chase Tower (Dallas) (Photo credit: Wikipedia)

- Goldman Sachs Headquarters, New York City (Photo credit: Wikipedia)
Update: BlackRock to restrict subscriptions into 2 Euro money funds
We were the first to bring news that overnight JPMorgan has halted investment in its European money market funds following the ECB’s decision to cut the deposit rate to 0%. Now, it is Goldman’s turn:
GOLDMAN HALTS INVESTMENTS IN EURO GOV MONEY FUND AFTER ECB CUT
GOLDMAN SAYS MARKET CONDITIONS WILL DETERMINE WHEN FUND REOPENS
GOLDMAN DECISION AFFECTS EURO GOVERNMENT LIQUID RESERVES FUND
And finally the conclusion, which is rather obvious:
- GOLDMAN FUND MEMO: EUROPEAN MARKET IN `UNCHARTERED TERRITORY’ (Er, sic?)
More from Bloomberg:
JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and
BlackRock Inc. (BLK) closed European money market funds to new
investments after the European Central Bank lowered deposit rates to
zero.
JPMorgan, the world’s biggest provider of money-market funds, won’t
accept new cash in five euro-denominated money- market and liquidity
funds because the rate cut may result in losses for investors, the
company said in a notice to shareholders. Goldman Sachs won’t accept new
money in its GS Euro Government Liquid Reserves Fund, and BlackRock,
the world’s largest asset manager, is restricting deposits in two
European funds.
JPMorgan’s five closed funds had 23.7 billion euros ($29.2 billion)
in assets as of July 5, the bank said in an e-mail, about 22 percent of
all euro-denominated money funds. The funds are JPMorgan’s Euro
Liquidity Fund, Euro Government Liquidity Fund, Euro Money Market Fund,
Euro Liquid Market Fund and JPMorgan Series II Funds — EUR.
The deposit rate cut “will almost certainly move cash bids in
short-dated instruments into negative territory, and so we have taken
the step to restrict subscriptions and switches into the funds in order
to protect existing shareholders from yield dilution,” JPMorgan said on
its website.
The company had $417 billion in money fund assets as of May 31,
making it the world leader, according to Crane Data LLC, a research firm
based in Westborough, Massachusetts. The entire euro-denominated money
fund industry has about 108 billion euros, Crane Data’s statistics show.
Effectively, the European money market industry is now closed and
only redemptions will be allowed as nobody can make «money» in money
markets in a Zero deposit rate environment. As another reminder, there
are hundreds of billions in residual cash in various European money
markets which is no longer welcome. Which then begs the question: as the
cash is unwound will it go into:
i) stocks
ii) bonds
iii) mattresses
iv) breaking the Swiss National Bank as everyone buys CHF and send the nominal yield on the 2 Year Swissie to -#Ref!
v) gold
We will find out soon enough.
μέσω European Money Market Industry Shutting Down As Goldman Closes MM Fund, Says In «Unchartered Territory» | ZeroHedge.
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