Fitch: U.S. Money Funds' Investments in European Banks Drop Below Fed RRP for First Time

CHICAGO--()--U.S. taxable money market funds (MMFs) continued to shift their investments away from European banks toward the Federal Reserve's reverse repurchase (RRP) facilities during 2014, according to a new Fitch Ratings report. By year-end 2014, MMF exposure to the Fed's RRP facilities (both overnight and term) exceeded allocations to European banks for the first time.

Increasing risk aversion in the second half of 2014, together with a continuing decline in demand for dollar funding among European banks, drove the shifts in MMF investments last year.

MMF exposure to European bank CDs, time deposits and repo fell by 11.3% in 2014 to $319.2 billion as of Dec. 31. A drop in exposure to German banks primarily drove this change.

The full report 'U.S. Money Funds: Exposure to European Banks Continues Decline' is available at 'www.fitchratings.com.'

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

Applicable Criteria and Related Research: U.S. Money Funds: Exposure to European Banks Continues Decline

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=861728

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Contacts

Fitch Ratings
William Warlick
Senior Director
+1 312-368-3141
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Robert Grossman
Managing Director
+1 212-908-0535
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
William Warlick
Senior Director
+1 312-368-3141
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Robert Grossman
Managing Director
+1 212-908-0535
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com