PNC Begins Winding Down Commercial Paper Business
PNC Financial Services Group Inc. (PNC), the second-largest U.S. regional bank, is winding down Market Street Funding LLC, a commercial-paper company it administers.
Market Street had $5.9 billion of the short-term debt outstanding as of June 30, Pittsburgh-based PNC said today in a regulatory filing. The bank said it will fund Market Street’s loans and commitments “utilizing its diversified funding sources.”
The wind-down is part of PNC’s “strategy to diversify and extend its borrowing base, particularly in light of ongoing regulatory developments,” the bank said in the filing.
The Basel Committee on Banking Supervision’s liquidity coverage ratio, scheduled to be phased in starting in two years, requires banks to hold enough “high-quality liquid assets” -- predominantly cash and government debt -- to survive 30 days of stress. The Basel group earlier this year expanded the types of assets that can be counted as liquid.
The decision isn’t expected to have a material impact on PNC, the bank said.