Fitch: U.S. Money Fund Exposure to Eurozone Banks Stabilizes

NEW YORK--()--U.S. prime money market fund (MMF) exposure to Eurozone banks has remained relatively steady through the first-half (1H) of 2013 except for a temporary drop in March, according to a Fitch Ratings report.

Exposure to Eurozone banks represents 14.5% of total MMF assets within Fitch's sample as of end-June 2013. Fitch believes this stability in part reflects improved investor sentiment towards the Eurozone following last summer's European Central Bank (ECB) actions.

Between end-June 2012 through end-June 2013, MMF allocations to Eurozone banks increased 89% on a dollar basis. Although the intensity of the Eurozone crisis continued to subside through 1H 2013, Fitch notes that MMF exposure to banks in that region remain approximately 60% below their May-2011 levels. Fitch believes that there are several indications that MMF Eurozone allocations of 15% - the average through 1H 2013 - could be a new steady state rather than a move towards the full resumption of mid-2011 levels.

The proportion of eurozone and European exposure in the form of repos has remained below 20% of these banks' collective exposure in each of the past three months, well below the levels of roughly 40% of exposure during the height of the crisis last summer.

The full report 'U.S. Money Fund Exposure to European Banks: Stabilization' is available at 'www.fitchratings.com.' Fitch's sample is based on the top-10 U.S. prime money market funds, which represents approximately $652 billion - or 46% - of the estimated $1.43 trillion in total U.S. MMF assets under management.

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

Applicable Criteria and Related Research: U.S. Money Fund Exposure and European Banks: Stabilization

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=714720

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Contacts

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

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Contacts

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