Market Overview

Fitch: U.S. Money Fund Exposure to Eurozone Rises for Third Consecutive Month

Share:
NEW YORK--(BUSINESS WIRE)--

Link to Fitch Ratings' Report: U.S. Money Fund Exposure and European Banks: Signs of Easing

U.S. prime money market funds (MMFs) increased their exposure to eurozone banks for the third consecutive month, according to Fitch Ratings.

As of end-September, MMF exposure to eurozone banks represents 10.6% of total holdings, a 16% increase on a dollar basis since end-August 2012. Fitch notes, however, that overall U.S. MMF eurozone bank exposure remains 70% below end-May 2011 allocations. Fitch believes this level is unlikely to be fully retraced in the intermediate-term given both the lingering investor caution towards the eurozone and banks' diminished appetite for this potentially unstable form of wholesale funding.

Exposure to French banks rose to 3.9% of MMF assets, a new high for 2012 and a 44% increase since the prior period.

In another apparent sign of easing, a declining proportion of European and eurozone exposure was in the form of repurchase agreements (repos). This reduction in secured exposure is another potential sign of a more positive investor posture towards banks in the region.

The 15 largest exposures to individual banks, as a group, comprise approximately 42% of total MMF assets. Only one eurozone banks remains in the top-15, according to the report.

The full report 'U.S. Money Fund Exposure and European Banks: Signs of Easing' is available at 'www.fitchratings.com.' Fitch's analysis is based on the ten largest U.S. prime MMFs, whose holdings represent approximately 45% of total U.S. prime MMF assets.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch Ratings
Robert Grossman, +1-212-908-0535
Managing Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Martin Hansen, +1-212-908-9190
Senior Director
or
Media Relations
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com

View Comments and Join the Discussion!
 

Partner Center