Major global banks will charge customers to hold deposits in currencies such as Swiss francs and the Danish krone in an effort to extract profits from those looking to escape the controversial euro. The two countries have pared interest rates as a way of keeping their currencies from appreciating.
Bank of New York Mellon (NYSE: BK) and State Street (NYSE: STT), two of the world's largest custodial banks, are charging insurance firms, asset management companies and related institutions to hold deposits in francs and kroner, according to Bloomberg.
BNY Mellon started charging for krone deposits last month a person with knowledge of the matter said, but the company is not charging for deposits in francs, Bloomberg reported.
As the eurozone's sovereign debt crisis has escalated, so have concerns over bank runs. Earlier this year, withdrawals from Greek banks were averaging two billion to three billion euros per month. Analysts speculated the bulk of those deposits were heading to Nordic countries such as Denmark, Norway and Sweden.
Those countries along with Switzerland have all retained AAA credit ratings amid the eurozone crisis. State Street is charging 0.25 percent for accounts in francs, Bloomberg reported. The CurrencyShares Swiss Franc Trust (NYSE: FXF) fell on the news on Monday.
This article was originally published on Benzinga
, and is republished here with permission.
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