STT State Street Corporation

State Street Launches Regional Data Providing Insight into the Risk Appetite of Institutional Investors in Europe, North America and the Asia-Pacific Region State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), released today the results of the State Street Investor Confidence Index(R) for September 2005. For the first time, State Street also launched regional data for institutional investors in Europe, North America and the Asia-Pacific region. According to the September index, investor confidence decreased by 1.3 points from August's revised reading of 85.3. North American institutional investors' risk appetite registered at 99.4, compared to 69.4 for European investors and 81.4 for institutional investors in Asia. Developed through State Street Global Markets' research partnership, State Street Associates (SSA), by Harvard University professor Ken Froot and SSA Director Paul O'Connell, the State Street Investor Confidence Index(R) measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors. The index is based on financial theory that assigns precise meaning to changes in investor risk sentiment, or the willingness of investors to hold proportionally more or less of their portfolio in equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence. "Two years after the launch of the State Street Investor Confidence Index(R), we remain the industry's only quantitative measure of investor behavior," said Stan Shelton, executive vice president of State Street. "We can now provide another level of insight into investor behavior by assessing how risk tolerance varies across regions. This is yet another testament to our commitment of providing our customers with a broad array of tools they can utilize to reach their investment objectives." "In the early part of this month, we saw some retrenchment that dates back to before Hurricane Katrina, with investors moving out of equities and seeking safety," said Froot. "However, in the most recent weeks, the stimulative side of the post-Katrina rebuild has become clear and oil prices have fallen back. As a result of these later-in-the-month improvements, the overall decline of global risk appetite in September was small." "The global measure masks some of the regional differences," said O'Connell. "While the confidence of North American and Asian investors was flat to slightly up, the confidence of European investors weakened considerably against the backdrop of an uncertain outcome to the German election." Since its launch in September of 2003, the State Street Investor Confidence Index(R) has become a key economic indicator for asset owners, investment managers and central banks. As the only index providing a quantitative measure tracking the common buying patterns of institutional investors around the world, the State Street Investor Confidence Index(R) offers a unique look into the investment behavior and decisions of thousands of professional investors and their investment decisions. About State Street Global Markets: State Street Global Markets provides specialized investment research and trading in foreign exchange, equities, fixed income and derivatives. Its goal is to enhance and preserve portfolio values for asset managers and asset owners. From its unique position at the crossroads of the global markets, it creates and unlocks value for its clients with original flow-based research, innovative portfolio strategies, trade process optimization, and global connectivity across multiple asset classes and markets. State Street Global Markets' research team of leading academic and industry experts are committed to continually advancing the science, including theory and application of its proprietary investor behavior research and innovative portfolio & risk management technologies to helps its clients challenge conventional thinking, shape ideas, make more informed investment decisions and deliver measurable results. About the State Street Investor Confidence Index(R): The index is released globally at 10 a.m. Eastern time in Boston on the second to last Tuesday of each month. More information on the State Street Investor Confidence Index, including frequently asked questions and a calendar of release dates, is available at http://www.statestreet.com/investorconfidenceindex. The previous month's calculations for the index are revised to account for trading activity through the end of the reporting period. About State Street: State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading. With $9.6 trillion in assets under custody and $1.4 trillion in assets under management (as of June 30, 2005), State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street's web site at www.statestreet.com. This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street's business mix, the dynamics of markets State Street serves, and State Street's success at integrating and converting acquisitions into its business. Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2004 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, September 20, 2005, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.