21/10/2011
US money market funds slash exposure to French banks
US prime money market funds have reduced their total exposure to French banks by 62% on a dollar basis between month-end May and month-end September 2011, according to Fitch. French banks exposure currently represents 6.7% only of total holdings of USD654 billion within the agency’s sample of the 10 largest U.S. prime money market funds. At its peak in the second half of 2009, exposure to French banks represented 16.4% of all assets.As of month-end September 2011, U.S. prime money market funds have also reduced their total exposure to European banks by 14% on a dollar basis relative to month-end August 2011. European bank exposure currently represents 37.7% of total holdings, a decrease from 42.1% of fund total assets as of month-end August and from 47.2% as of month-end July. ‘In percentage terms, the current exposure level is the lowest observed within Fitch’s historical time series, which dates back to second-half 2006,’ said Robert Grossman, group managing director, Fitch Ratings. Fitch also notes that over the same timeframe of May 2011 to present, money market funds’ exposure to Canadian banks increased by 12%, and is now the largest single country exposure at 10.7% of total assets.
