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Fitch: U.S. Money Fund Exposure to French Banks Hits Two-Year High

Fitch Ratings-New York-26 September 2013: U.S. prime money market fund (MMF) exposure to eurozone banks increased for the second consecutive month, driven by rising allocations towards French banks, according to Fitch Ratings.

As of end-August 2013, exposure to eurozone banks represented 15.8% of assets under management within Fitch's sample of the top-10 U.S. prime MMFs. MMF allocations to French banks stood at 9.1% of assets, an 18% increase over the prior month. This allocation represents the highest level since end-August 2011, a period during which MMFs sharply reduced their exposure to eurozone banks amid intensifying concerns in the region.

While the increase in eurozone allocations signals more positive investor sentiment towards the region, Fitch notes that MMF exposure to eurozone banks continues to be less than half of its May-2011 allocations.

The proportion of eurozone and European exposure in the form of repos fell to levels last observed in 2011. At end-August, about 13% of MMF exposure to eurozone banks was in repo, well below the levels of about 40% of exposure observed in the latter half of 2012. Fitch believes this reduced presence of repo indicates that MMFs are more willing to take unsecured exposure to banks in the region.

The full report 'U.S. Money Fund Exposure and European Banks: France at Two-Year Low,' is available at 'www.fitchratings.com.'

Fitch Ratings, Inc.
One State Street Plaza New York, NY 10004

Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Money Fund Exposure and European Banks: France at Two-Year High

Mardi 1 Octobre 2013

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