Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
Euros

10468

US money fund exposures to Eurozone banks reach record low, says Fitch

RELATED TOPICS​

US prime money market fund exposures to Eurozone banks declined 33 per cent during the month of June 2012 and now represent approximately eight per cent of total MMF assets, according to Fitch Ratings’ study of the exposures of the 10 largest US prime MMFs.



This figure represents a record low during Fitch’s period of study going back to end-2006.

Aggregate MMF allocations to the rest of Europe declined moderately with decreasing exposure to UK banks partially offset by increased allocations to Nordic banks. Outside of Europe, MMF exposures to Japanese banks have doubled since May-2011 and are now at their highest level, at almost 12 per cent of total fund assets, over Fitch’s study period. Holdings of Canadian and Australian banks remained relatively steady.

“Money fund disengagement stems from both ongoing risk aversion and heightened caution by some European banks and their regulators on using this potentially volatile form of funding,” says Robert Grossman, managing director, Fitch Macro Credit Research.

The 15 largest exposures to individual banks collectively represent approximately 43 per cent of total MMF assets. Consistent with Fitch’s findings, only one Eurozone institution remained within the top 15, compared with three Eurozone banks at end-May 2012 and seven at end-May 2011.

Holdings of short-term US Treasuries and agencies continue to exceed 20 per cent of MMF assets, another sign of risk aversion. Additionally, almost 10 per cent of MMF assets are in the form of repos collateralized by Treasurys and Agencies, meaning in effect that roughly one-third of prime MMF assets within Fitch’s sample represent Treasury and Agency exposure, versus 20 per cent as of end-May 2011.

Latest News

Brown Brothers Harriman & Co has expanded its relationship with AllianceBernstein (AB), by adding to..
The trading and investment platform eToro has extended its proxy voting feature to all stocks..
C8 Technologies, the London-based fintech founded by former BlueCrest Capital Management partners Mattias Eriksson and..

Related Articles

The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a possible buyout of EY’s Italian consulting branch...
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a..
Pension funds
UK defined benefit (DB) pension plan sponsors could have access to GBP 1.2 trillion in surplus assets over the next decade, industry research reveals...
UK defined benefit (DB) pension plan sponsors could have access to GBP 1.2 trillion in surplus assets over the next..
Tim Crawmer, Payden & Rygel
Tim Crawmer and Frasat Shah of Payden & Rygel write that higher yields are attracting more demand from investors. Also, given that equities had a strong year last year, big funds have taken some chips off the table in equities and put them into fixed income...
Tim Crawmer and Frasat Shah of Payden & Rygel write that higher yields are attracting more demand from investors. Also,..
Lady justice
Top marks for the Pensions Regulator (TPR) whose efforts to improve resilience in the UK pension funds’ liability-driven investment (LDI) strategies received glowing commendations from the Bank of England in its March report...
Top marks for the Pensions Regulator (TPR) whose efforts to improve resilience in the UK pension funds’ liability-driven investment (LDI)..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by