U.S. money funds raise euro zone holdings in October: Fitch

NEW YORK Fri Nov 30, 2012 4:34pm IST

Stocks

   

NEW YORK (Reuters) - The biggest U.S. prime money market funds increased their holdings of euro zone bank debt in October on reduced worries about the impact of fiscal problems in Greece and Spain on the region's banking system, a report by Fitch Ratings released on Friday showed.

The 10 largest prime money funds raised their euro zone bank exposure by 24 percent from September, bringing their holdings to 13 percent of total assets.

This was the fourth monthly increase in euro zone exposure among these funds, whose combined assets were $654 billion, or 46 percent of the $1.42 trillion assets held by all U.S. prime funds.

The funds' exposure to French banks rose to 5 percent of assets, up from 3.9 percent and the highest level since October 2011, when it was 5.5 percent.

Half of that exposure in French banks was in certificates of deposit, commercial paper, repurchase agreements and other short-term debt issued by Societe Generale, according to the rating agency.

Moreover, the funds' exposure in German and Dutch banks rose by 25 percent and 19 percent, respectively, in October.

Still, the euro zone exposure of these funds, which are major investors in short-term bank debt, remained about 63 percent below the end of May 2011, when the euro zone debt crisis flared up again. Their French bank paper holdings in October were more than 70 percent below their May 2011 levels, Fitch said.

Meanwhile, the biggest prime funds reduced their holdings in perceived safer Swiss, British, Japanese and Canadian banks. They also scaled back holdings of U.S. Treasuries last month.

(Reporting by Richard Leong. Editing by Andre Grenon)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Press Event

Press Event

Modi takes tea, but no questions, in first press event as PM.  Full Article 

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage