Money-Market Shifts Are Bad News for Profit-Starved Global Banks

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Heard on the Street: Non-U.S. banks are watching one of their limited avenues for profit in recent years slowly closed off

Last week, Fidelity Investments said it would close two institutional prime money-market funds with a total of around $14 billion in net assets. That’s an ominous portent for some non-U.S. banks, which have increasingly come to rely on such funds to raise dollars they can’t easily acquire at home.

Fidelity cited volatile outflows from the funds—which invest in short-term commercial paper and certificates of deposit issued by companies—and into government money-market funds during moments of market stress. Fidelity’s retail...

 

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How does any bank fail when they can lend out ten times more money than they actually have creating it out of nothing? Must be a lot of internal fraud. We need more bank audits starting with the Fed.

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