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Depositors Fleeing Euro Get Negative Rates

State Street, BNY Mellon charge to hold Danish kroner, Swiss francs.

By Bradley Keoun, Bloomberg News | Updated on October 09, 2012

State Street Corp. and Bank of New York Mellon Corp., two of the world’s biggest custody banks, will charge depositors to hold Danish kroner and Swiss francs as customers seek refuge from the crisis-stricken euro.

State Street will apply a negative interest rate of 0.75 percent annually to krone deposits starting Nov. 1, with a separate charge for francs, according to a note to clients last week. That means money managers, insurance companies and pension funds must pay the bank to hold their cash. BNY Mellon started charging for krone deposits last month, a person with knowledge of the matter said. The lender isn’t charging for francs.

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