BNP Paribas Halts Fund Withdrawals
France’s biggest bank can’t value holdings after credit collapse
By Heather McPherson,  Newser User
Posted Aug 9, 2007 12:35 PM CDT
BNP Parisbas Chief Executive Baudoin Prot smiles before presenting the bank's full-year 2006 results in Paris, in this Feb. 15, 2007 file photo. BNP Paribas, announced Thursday, Aug. 9, 2007 that it...   (Associated Press)
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(Newser) – France's largest bank today froze three investment funds threatened by the subprime mortagage collapse, claiming it can’t “fairly” place a value on their rapidly declining assets. Citing the “complete evaporation of liquidity” in the US securities market, BNP Paribas halted withdrawals from the funds, which were worth $2.2 billion, down 20% in less than 2 weeks, Bloomberg reports.

“For some of the securities there are just no prices,” said a BNP Paribas executive. The company’s shares fell 5.5% on the announcement, and the European stock index dropped more than 2%. As recently as last week, the bank had said its exposure to the American subprime crisis was “absolutely negligible.”