93751--2/21/2006--STATE_STREET

related topics

{condition, economic, financial}

{operation, international, foreign}

{regulation, government, change}

{regulation, change, law}

{product, market, service}

{operation, natural, condition}

{acquisition, growth, future}

{property, intellectual, protect}

{customer, product, revenue}

{loan, real, estate}

{capital, credit, financial}

{competitive, industry, competition}

{control, financial, internal}

{financial, litigation, operation}

If market interest rates rise, our securities finance and net interest revenues can be negatively affected in the short term. If values in worldwide securities markets decline, our revenue and earnings can be adversely affected. If foreign exchange rate volatility decreases, our revenue can be adversely affected. If we do not maintain our capital requirements and our status as a well-capitalized financial holding company, there could be an adverse effect on the manner in which we do business and on the confidence of our customers in us. If there is a decline in individual savings rates, our business can be adversely affected. While increased cross-border investing by our customers worldwide benefits our revenue, increased worldwide economic and political instability can adversely affect our business. If there is a decline in the pace at which customers outsource their middle office or investment management operations, our business can be adversely affected. If we do not perform effectively under our outsourcing contracts, we may not generate the operating margins that we expect, or we may lose customers before we earn back our investment in the contracts. If we do not successfully integrate businesses that we acquire, or successfully complete divestitures, we may not realize the expected benefits of the transaction. If we are subject to changes in tax legislation, the interpretation of existing tax laws worldwide or changes in accounting principles, we may be required to report a material charge to our results of operations. If the pace of pension reform slows, or if pension reform does not occur, our revenue and earnings can be adversely affected. If we do not maintain compliance with governmental regulation, we can be subject to fines, penalties or restrictions of business in the jurisdiction where the violation occurred, which can adversely impact our business. If, for regulatory reasons, we are limited in our ability to invest additional capital in subsidiaries outside the United States, we may not be able to stay competitive in those markets, and our business could suffer. Investigations into the financial services industry can adversely affect our business. If the business continuity and disaster recovery plans that we have in place are not adequate to continue our operations in the event of a disaster, the business disruption can adversely impact our operations. If we are not able to anticipate and keep pace with rapid changes in technology, or do not respond to rapid technological changes in our industry, or if growth in the use of technology in business is not as rapid as in the past, our business can be adversely affected. If we are unsuccessful in protecting our proprietary rights, or if we are found to have violated the proprietary rights of others, we can experience a decline in revenue or an increase in expenses. If our access to the capital markets is limited, our capital resources and liquidity could be adversely affected. If there is a significant economic downturn in either a country or a region, or the failure of a significant individual counterparty, our credit and counterparty risk profile could be adversely affected and result in loss.

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93751--2/21/2006--STATE_STREET_CORP