BNY Mellon to Slap Fees on Some Big Deposits Amid Global Race to Cash

[Recursion]

Yield is going negative again:

http://online.wsj.com/article/SB10001424053111903366504576488123965468018.html?mod=WSJ_hp_MIDDLETopStories

Bank of New York Mellon Corp. is preparing to charge some large depositors to hold their cash, in the latest sign of the worries roiling global markets.

The big U.S. custodial bank said this week in a note to clients that it will begin slapping a fee next week on customers that have vastly increased their deposit balances over the past month.

The bank cited the heavy dollar deposits it has received over recent weeks, as investors and corporations retreat from financial markets amid Europe's debt crisis and the recent debate over U.S. government borrowing.

"In a way they're pushing out this hot money that came in over the last couple of weeks, or at least trying to offset their expenses associated with taking it in," said Brian Smedley, a rates strategist at Bank of America Merrill Lynch. "This has led to lower front-end rates across the board."

So we have a shit ton of liquid capital with 0 momentum. The problem is obvious; the solution less so.

[brooklynite]

1. Boy, if only there was some bank regulation...

[ProgressiveProfessor]

2. What kind of regulation would you propose for this kind of situation?