Investors are understandably jittery, but State Street Corp. has issued a statement affirming that its money market funds are stable.
State Street’s stock was off sharply in afternoon trading, and hit a low not seen since 1998. The Boston-based company says it would have ample liquidity, even if it needed to consolidate, reports the Associated Press. It says it raised $2.8 billion in equity capital in June and doesn’t currently have plans to raise more capital.
Furthermore, its money market funds never fell below $1, and have no exposure to Lehman Brothers (LEH), Merrill Lynch & Co. (MER), Washington Mutual (WM), Wachovia (WB) and Morgan Stanley (MS).
Money market funds are supposed to be conservatively invested, and the next best thing to cash. Redemptions within these funds have become another factor in the global credit crisis.
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