Insufficient Money in Investment Trustee Companies

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Insufficient Money in Investment Trustee Companies

Large amounts of market money have flowed into investment trustee companies this year comprised mostly of 3 month term 'hot money'.
Thus in March when most of the expired hot money returns to the companies, some may worry of a fund crisis.
According to financial sectors, 29 billion dollars was poured into the trustee groups and 70 percent of that money was less than 3 month short term speculation.
Although the recent interest rates at banks are low, major business groups are actively pouring out money on short term investment companies' units due to their high interest rate policy.
Domestic banks' yearly interest rate is now 8 percent while the interest rate for investment companies is 11 percent.
A source from Daehan Investment Trustee asserted on February 7, 'Since the trustee companies are hurt by a lot of mismatching, there may be a financial crisis among some companies come March. Rather than short term hit-and-run money, there should be more fund stable and perennial money.'
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