JPMorgan Chase & Co. (JPM) and Citigroup
Inc. are among at least five banks urging big clients in the
U.S. to park cash elsewhere as new rules make it onerous to hold
certain deposits, the Wall Street Journal reported.
HSBC Holdings Plc (HSBA), Deutsche Bank AG and Bank of America Corp. expressed similar concerns in private talks with customers in past months, the newspaper said, citing unidentified people familiar with the conversations. In some cases, banks told clients -- including corporations, hedge funds, insurers and smaller lenders -- that fees may be added to accounts that have been free, it said.
The push was prompted by pending rules aimed at ensuring banks stockpile enough assets that can be easily converted to cash to cover a deposit flight in a crisis, the newspaper said. Because big, uninsured deposits are viewed as more susceptible to fast withdrawal, banks would be required to bolster related reserves rather than pursuing more profitable investments.
JPMorgan’s commercial bank recently told some clients it would start charging monthly fees on deposit accounts from which they can withdraw money at any time, the Journal wrote, citing an October memo it reviewed. The charges take effect Jan. 1 for U.S. accounts, and later for international accounts, the newspaper cited the memo as saying.
Spokesmen for the banks in Hong Kong either said they had no immediate response, declined to comment or didn’t respond to messages seeking comment.
Banks, struggling to balance rising costs for certain deposits, already have begun charging customers for holding large amounts of euros, passing on fees imposed by the European Central Bank. Bank of New York Mellon Corp., which holds money for institutional investors, began charging for euro deposits on Oct. 1, Chief Financial Officer Todd Gibbons said that month, joining peers in passing along so-called negative interest rates.
In the new push, banks are trying to work with big clients to find alternatives for some deposits, the Journal said.
To contact the reporter on this story: Alfred Liu in Hong Kong at aliu226@bloomberg.net
To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net; Paul Panckhurst at ppanckhurst@bloomberg.net David Scheer, Russell Ward
HSBC Holdings Plc (HSBA), Deutsche Bank AG and Bank of America Corp. expressed similar concerns in private talks with customers in past months, the newspaper said, citing unidentified people familiar with the conversations. In some cases, banks told clients -- including corporations, hedge funds, insurers and smaller lenders -- that fees may be added to accounts that have been free, it said.
The push was prompted by pending rules aimed at ensuring banks stockpile enough assets that can be easily converted to cash to cover a deposit flight in a crisis, the newspaper said. Because big, uninsured deposits are viewed as more susceptible to fast withdrawal, banks would be required to bolster related reserves rather than pursuing more profitable investments.
JPMorgan’s commercial bank recently told some clients it would start charging monthly fees on deposit accounts from which they can withdraw money at any time, the Journal wrote, citing an October memo it reviewed. The charges take effect Jan. 1 for U.S. accounts, and later for international accounts, the newspaper cited the memo as saying.
Spokesmen for the banks in Hong Kong either said they had no immediate response, declined to comment or didn’t respond to messages seeking comment.
Banks, struggling to balance rising costs for certain deposits, already have begun charging customers for holding large amounts of euros, passing on fees imposed by the European Central Bank. Bank of New York Mellon Corp., which holds money for institutional investors, began charging for euro deposits on Oct. 1, Chief Financial Officer Todd Gibbons said that month, joining peers in passing along so-called negative interest rates.
In the new push, banks are trying to work with big clients to find alternatives for some deposits, the Journal said.
To contact the reporter on this story: Alfred Liu in Hong Kong at aliu226@bloomberg.net
To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net; Paul Panckhurst at ppanckhurst@bloomberg.net David Scheer, Russell Ward
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