BNP Paribas to re-open funds this week

22 August 2007

BNP Paribas will this week re-open the investment funds it suspended earlier this month, it has been reported.

Withdrawals from the three funds were suspended in the wake of the crisis in the US subprime mortgage market.

However, according to a report from the Wall Street Journal, the bank is set to commence operations again this week.

A spokesman said: "We are planning to re-open the funds provided market conditions allow."

BNP Paribas cited the difficulty in valuing the funds - Parvest Dynamic, ABS and BNP Paribas ABS Euribor and BNP Paribas ABN Eonia - following an exodus from investors as the principal reason behind the decision to call a halt of withdrawals last month.

A statement from the bank said that the "complete evaporation of liquidity in certain market segments of the U.S. securitisation market has made it impossible to value certain assets fairly regardless of their quality or credit rating."
News of the bank's move comes as the French economy minister Christine Lagarde announced she would be probing the firm's chief executive over its recent conduct over the closure of the funds.
The decision to suspend the funds - which are worth a total of $2.16 billion - subsequently prompted a decline in the stock market.

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