The Financial Times writes "US custodian banks hit by shift into cash". It says, "Global custodian banks have adopted a defensive position as fund managers and large institutions shift into cash and ultra-safe assets, putting pressure on the banks' ability to generate income. Bank of New York Mellon earnings in the fourth quarter dropped from $679m last year to $505m. The quarter's results included a $107m restructuring charge, primarily a result of lay-offs. Low interest rates have put tremendous pressure on custodian banks that manage funds for large institutions and retail brokerages, with the Federal Reserve's commitment to near-zero rates through 2013 make it difficult to invest customer funds in safe investments that generate return. Coming at the same time that fees generated by trading and investment activity are falling sharply, such groups have been forced to rely on cost-cutting and lay-offs to generate consistent earnings growth."
