Bank of New York Mellon Corp., with $27.1 trillion of assetsunder custody and administration, said it's helping clients pullcash from Denmark and Switzerland as the central banks takemeasures to stem appreciating currencies.

“We've been working with our clients on how to sweep their moneyout of Denmark so they don't get subjected to a chargingenvironment,” Chief Executive Officer Gerald Hassell said in aninterview in Doha, Qatar. In Switzerland “we've been able to workwith our clients to not have cash trapped there.”

Denmark's Nationalbanken cut its deposit rate to minus 0.2percent in July, stepping up a battle to prevent the krone fromstrengthening beyond its currency band as the nation's haven statusattracts investors. Swiss National Bank Vice President Jean-PierreDanthine said in June that charging for deposits “is a measure wecould consider if circumstances warrant it.”

Denmark has an accord with the European Central Bank to let thekrone swing no more than 2.25 percent from a rate of 7.46038,though it maintains a tighter band in practice. TheCopenhagen-based central bank only adjusts rates to defend thekrone's peg to the euro. The SNB imposed a franc ceiling of 1.20versus the euro a year ago, a measure last used in the 1970s, asthe currency rose as much as 37 percent in the prior 12 months.

“We're very actively working with our clients to help themposition their cash to avoid that issue” of charges on deposits,Hassell said, during a client trip in the Middle East, where thebank has some of its largest customers.

BNY Mellon, the world's largest custody bank, also had $1.3trillion of assets under management at the end of June.

The bank on July 18 reported a 37 percent decline insecond-quarter profit as low interest rates and declining stockmarkets cut into revenue and BNY Mellon settled a lawsuit. The netinterest margin, the difference between what a bank pays ondeposits and receives on loans and investments, was 1.25 percent inthe quarter, an all-time low, Chief Financial Officer Todd Gibbonssaid in a telephone interview at the time.

“Low interest rates for everyone are a challenge,” Hassell said.“If rates were even 50, 100 basis points higher than what they aretoday we would earn several hundred million dollars per year.”

BNY Mellon, along with other managers, closed its European moneyfund to new investments because “we can't find new investments thatearn any yield,” said Hassell. “At the moment it's naturallyredeeming itself as time goes on.”

Funds Close

More than half of Europe's money market funds by assets haveclosed because securities they invest in pay negative returns afterthe ECB cut interest rates, Standard & Poor's said in July.Funds with assets totaling 79 billion euros ($97 billion) haveclosed, out of a pool of 133 billion euros rated by the NewYork-based firm, S&P said in a report.

The U.S. Federal Reserve, which yesterday announced its thirdround of large-scale asset purchases since 2008, also extended theprospect of near-zero interest rates until mid-2015 and said policywill stay accommodative “for a considerable time” even after theeconomy strengthens.

BNY Mellon is cutting about $750 million of costs over athree-year period and working on new initiatives to mitigate theimpact of lower interest rates. These include its so-called globalcollateral service, which is intended to help institutions findcollateral that can be posted for trades.

“We can't wait for interest rates to rise to get the returns ourshareholders are looking for,” Hassell said. “We have to controlwhat we can control as much as possible.”

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