Goldman Sachs Group Inc. joined BlackRock Inc. in reopeningeuro-denominated money-market funds to new clients as yields on thesafest debt rose.

BlackRock, the world's biggest money manager, lifted arestriction on new investment in its 17.7 billion-euro ($24billion) Institutional Euro Liquidity Fund this month, MarkStockley, the firm's head of international cash sales, said in aninterview in London on Feb. 14. Goldman reopened its EuroGovernment Liquid Reserves fund to new subscriptions last week,spokeswoman Anisha Patel said by phone.

BlackRock placed restrictions on investors putting money intotwo euro-denominated funds in July, while Goldman shut itsgovernment fund, after the European Central Bank cut its depositrate to nil and yields on the safest government debt tumbled. Theyield on German three-month notes rose above zero percent lastmonth for the first time since May as ECB policy makers left ratesunchanged.

“We've seen a modest improvement in the short-dated euro marketto the point where, in the prime fund, we're able to placeinvestments and are therefore accepting subscriptions,” saidStockley.

The one-month yield on BlackRock's Euro Liquidity Fund was 0.15percent in January, the New York-based firm said. BlackRock's fundinvests in top-rated commercial paper issued by governments, banksand companies and is the firm's biggest money-market fund in thecurrency.

BlackRock is keeping restrictions imposed on its Euro GovernmentLiquidity Fund, though it will monitor the market “until hopefullywe see more signs of improvement,” Stockley said.

Goldman's government fund has about 644 million euros undermanagement and is open for clients to deposit 25 million euros aday each, the New York-based bank said. Its Euro Liquid ReservesFund, which had a 25 million-euro daily limit, is now allowinginflows of 250 million euros per client per day. The fund managesabout 10.1 billion euros, the company said.

Money-market funds invest in short-term, high-grade debtsecurities that are safe and liquid with the aim that clients areguaranteed their money back.

JPMorgan Chase & Co., the world's biggest provider ofmoney-market funds, also closed euro funds last year as it becamemore difficult to invest clients' assets at a profit. The managerhas since reopened its Euro Liquidity Fund, Euro Money Market Fund,Euro Liquid Market Fund and JPMorgan Series II Fund in euros, JimFuell, head of global liquidity EMEA, said by phone. The firm'sEuro Government Liquidity Fund remains closed to new money, hesaid.

“The restrictions that we put in place in July were in the bestinterest of all our shareholders and they were gradually relaxedover time,” Fuell said. The manager reopened the funds in November,when the market was indicating a very low likelihood of a furtherrate cut by the European Central Bank, he said.

President Mario Draghi said on Feb. 7 the decision to continueto hold rates at record low levels was unanimous and economicactivity in the euro area should gradually recover this year. Grossdomestic product in the region shrank 0.6 percent in the fourthquarter from the previous three months, the European Union'sstatistics office in Luxembourg said Feb. 14, stoking appetite forthe safest securities.

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