Huge Deposits Increase
Glenn Schorr – Nomura: I am curious if you could expand a little bit on the big increase in deposits, where it came from what kind of clients were there, where are you putting the assets right now?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: Yeah. Most of the deposit increase, Glenn, was a spike right in the end of the quarter. So, it’s going to be relatively temporary. If you look at for the quarter on average, it was only up about $3 billion.
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Glenn Schorr – Nomura: But, so you mentioned, it’s back at the end of the quarter, but temporary just client parking money, not putting money to work, so I’m assuming you’re keeping, parking that at the Fed?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: That’s right. That’s going to be in and out over maybe a four-week period.
Glenn Schorr – Nomura: On the NIM side, if you look at through the detail on the average balance sheet, it’s kind of the simple that, asset yields coming down at those deposits, primarily foreign deposits, and it seems like you have less room on the liability side, is that basically where we’re at now and you mentioned, you think you could defend these levels even with the ECB cut, but is there any chance to move the deposits over maybe with the Fed and pickup a little bit?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: It would be a wonderful thing if you could actually, Glenn, swap the deposits, swap euros into dollars and leave them at the Fed, but the swap would go again negatively – it actually will create a negative interest rate, so at this time, not much of a change there.
Glenn Schorr – Nomura: And so with no change, is this the type of quarterly progression we’re looking at or was that like a one-time step down and now we can hold these levels even if rates don’t move?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: I think, we can hold these levels. We do have some headwinds here, because we do tend to leave some money at the European Central Banks and that was – in the past we’ve receive a little bit of an interest rate, we won’t see that going forward for the foreseeable future, but we are continuing to put more money to work primarily in dollars where we are continue to find some pretty attractive low risk assets. And I think that will offset the two headwinds, if you will.
Gerald L. Hassell – Chairman, President and CEO: And Glenn, I also want to emphasize that as we’re doing this, Todd made some comment in his opening commentary that we have been a little bit slower in putting some of the money to work. It’s frankly we’ve been quite conservative in putting the money to work because we want to say within our risk appetite. We’re not looking to go out of the balance of our risk parameters and we just don’t think it’s prudent to do so in this kind of environment.
Glenn Schorr – Nomura: Last one is just maybe a little more color on the huge flows that you keep seeing what products are these? What’s the average fee relative to the current book of business, anything you could help there would be great?
Gerald L. Hassell – Chairman, President and CEO: Glenn, are you referring to asset management?
Glenn Schorr – Nomura: Correct.
Gerald L. Hassell – Chairman, President and CEO: let me turn now one over to Curtis.
Curtis Y. Arledge – Vice Chairman and CEO, Investment Management: Glenn, in the first quarter we actually seen a long-term flows of $7 billion and this past quarter it was $26 billion, I’d actually tell you the composition was pretty different. As you know the markets were a little bit better in the first quarter. Equity markets were up and we saw higher average fee products in the first quarter. In the second quarter, it did revert back to more fixed income, more index products, so we frequently talk about our business in terms of assets under management. From a revenue perspective though they are actually pretty similar quarters, the $26 billion would have been in lower average fee products and we do see in our pipeline, I will tell you that our pipeline is generally are more favorable. The mix is toward higher fee products, so actually our one not funded mandates have a slightly higher average fee going forward at the end of the second quarter – end of the first quarter.
Leaning Toward Secured Global Lending
Howard Chen – Credit Suisse: Todd, just putting frictional deposits aside, can you just provide an update on some of the taxable actions to stabilize and expand the NIM that you laid out at Investor Day and do your thoughts changed at all now that we’re seeing some further compression across the yield curve and the long end?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: Sure, not a whole lot. We indicated to you is that we would invest in some RMBS securities primarily agencies, but there are some non-agencies in note as well. So in asset backed securities which we continue, we’re probably doing a little more treasuries than we would’ve thought just given the rate environment and the risk environment. So, I’d say it was a combination of the three of those. Outside of the securities portfolio, we have begun a program of secured lending globally that is slower than we had anticipated but it is slowly building and we’re continuing to add to that. We also see some opportunities for example in trade finance as you’ve had a number of folks exit. That has grown. We got a big (pop) a while back. It’s grown a little more modestly but that’s another area that we’d be looking to push.
Howard Chen – Credit Suisse: Shifting gears to the revised Basel III guidance, there seems to be a lot of questions in the market, and I think it’d be helpful if you could just walk through some of the moving parts of the new guidance, maybe walk through what your risk weighting assumptions were before and what they are now in some of the various parts of the portfolio that are being impacted?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: We’re kind of unusual as you know Howard, because we had maintained a large portfolio of some investment grade securitizations and that was the portfolio even though we had marked it to market and we felt it was actually a pretty attractive and not nearly as risky asset especially where we were carrying it. It actually required more than 100% capital against it. So under the revised guidance and what is known as the simplified, supervised formula approach which I can tell you is anything but simplified, but under that guidance, the capital associated with those certain investment grade securities declined pretty significantly, still very high, but to a much more reasonable level. So, as we had indicated in the past. That was probably costing us 250, maybe even 300 basis points against our Tier 1 common ratio. That probably declined by 200 basis points. So we picked up a very large benefit there, about a two-third reduction. That was offset by a couple of other items; number one is, the investment grade securitizations moved from a floor of about 7% to a floor of 20%, and depending on the attachment point, the detachment point and the delinquencies in the underlying securities, they can be even higher than the 20%. So, that was a give back of some of that 200 basis points that I just described. In addition, there is a correlation multiplier for primarily financial institutions exposure since we do have financial institutions exposure. That had a negative impact to us, as did the – a smaller one, but as did the market risk assessment that came in the quarter as well. So, all of those amounted to about 145 basis points of benefit, and then our balance sheet grew in the second quarter by about 35 basis points, hence the requirement, hence the 110 basis points that we reported.
Howard Chen – Credit Suisse: You’ve always stressed the point that the past few stress tests have been predominantly Basel I focus, but I am just curious, given this improved guidance post the NPRs, how does this change your capital return philosophy? Would you think about resubmitting a CCAR for more capital return this year?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: Yeah, we’re nicely positioned under Basel III, as you can see here, but well ahead of where even we had anticipated, we would be. I think, we think it’s reasonable to frankly, we didn’t think that the sub-investment grade security should have attracted the amount of capital that they had. So, basically it’s in line with what our thinking was. So, we’re happy to see that that we have greater flexibility and we’re happy to see that others in the past have been able to take capital actions at significant levels.
Howard Chen – Credit Suisse: And then just final quick numbers one from me Todd that merit increase that began in July 1st, that you spoke too, is there any way to kind of size the impact of that?
Thomas P. (Todd) Gibbons – Vice Chairman and CFO: It’ll probably be about a $0.01 of expense.