BNP to reopen frozen funds in subprime blizzard
Tuesday, August 28, 2007 : PermalinkPARIS (Reuters)- BNP Paribas said on Thursday it would reopen next week three investment funds it had frozen this month amid subprime volatility in a step that may help restore investor confidence,which took a hit on their suspension.
Chief Executive Beaudoin Prot told a French newspaper it was too early to assess the impact of the U.S. subprime market crisis on BNP Paribas accounts, but that the decision to freeze and then reopen the funds underlined its prudent investment .
But he added in the interview, to be published on Friday in Les Echos, that he expected France’s biggest listed bank to have a good performance relative to other banks.
He said the subprime crisis highlighted the fact that many buffers in financial markets — due to various intermediaries between market segments — had disappeared. This was due to the rise of both new securitisation products, which parcel risks from one market into another, and new players such as hedge funds, which move with lightning speed to take account of pricing differences between market segments or regions.
On August 9, BNP Paribas said it had frozen three funds holding about 1.6 billion euros (1.1 billion pounds) following problems in the U.S. subprime mortgage sector, a move which added to turmoil in global financial markets.