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Morgan Stanley funds suffered $46b net outflow
Morgan Stanley clients withdrew a net $46 billion from money-market accounts last month, forcing the embattled investment bank to buy $23 billion of securities from the funds to keep them afloat.
- Agencies
- Published: 18:05 October 27, 2008
New York: Morgan Stanley clients withdrew a net $46 billion from money-market accounts last month, forcing the embattled investment bank to buy $23 billion of securities from the funds to keep them afloat.
According to its quarterly results, filed with the Securities and Exchange Commission, anxious customers withdrew cash from money-market and liquidity funds as the breakdown of capital markets hammered banks and raised doubts about the future of Wall Street.
The September flight followed net outflows of $8 billion in the three months ended Aug. 31, Morgan Stanley said in the filing.
Morgan Stanley purchased securities to help fund investor redemptions as a wide range of money market instruments were impossible to trade. The bank said it bought highly rated, short-term commercial paper, municipal bonds, certificates of deposit and notes for its own books.
Such purchases could fuel losses for Morgan Stanley in future periods, if the recent past is any guide.
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