International Herald Tribune – When Gerald Hassell, president of the Bank of New York, told shareholders this month that hedge funds presented “opportunities to drive this business,” he did not say how badly his company had been squandering those chances.
Bank of New York, State Street, Mellon Financial and Northern Trust, the biggest independent U.S. custodial banks, should have been a natural fit for hedge funds.
They safeguard $29 trillion in stocks and bonds that hedge fund managers want to borrow for trading. Instead, the banks let Wall Street firms including Goldman Sachs Group step in and split annual fees of $5.5 billion from lending stock, almost as much as Bank of New York’s 2005 revenue.
