Pacific Investment Management Co., the manager of the world's biggest bond fund, is pulling back from Europe's short-term money markets because of the risk of losing investors' cash.

Pimco closed its 80 million-euro ($104 million) liquidity fund yesterday because record-low interest rates threatened its so-called stable net asset value, according to Michael Story, the firm's London-based global product manager.

Euro-denominated money funds have been turning away clients, extending the maturity of holdings or waiving fees after the European Central Bank cut its deposit rate to zero on July 5, pushing down yields on the short-term debt to which the funds are restricted. Bank of America Corp. and SMBC Nikko Securities Inc. also closed euro money-market funds.

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