Much of State Street's profits are driven by fees from asset managers. Thus, a bear market could lower profits this year.
State Street has had legal issues with investors concerning losses in its bond funds.
State Street has four Asset-Backed Commercial Paper ("ABCP") conduits with approximately $29 Bn in assets. ABCPs have plunged due to the subprime crisis. State Street also has a $6 Bn MBS portfolio that may be subject to writedowns.