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March 21, 2012
Brattle Principal Michael Cragg Quoted in Reuters Article on BNY Mellon Tax Benefit

Brattle principal Michael Cragg was quoted in a March 20, 2012 Reuters article on a controversial tax benefit employed by BNY Mellon worth roughly $900 million.

BNY Mellon is among a number of U.S. banks that received a $1.5 billion loan from Barclays PLC that helped them to generate billions of dollars in tax credits with extremely cheap funding. In some cases the funding was so cheap that, at one point, Barclays actually paid BNY Mellon to take its money. On April 16, 2012 BNY Mellon will defend this tax benefit, which it calls a “legal funding strategy,” before the IRS.

"It not only defies economic theory but common knowledge that banks do not pay borrowers to take their money," said Dr. Cragg recently commented in testimony before the U.S. government in a Minnesota federal court, where Wells Fargo & Company is currently trying to recover $162 million from the government.

To read the complete article, please visit the Reuters website.