Breaking News

Tweet TWEET

Money-Market Funds Cut Europe Bank Investments to Lowest Ever

Money-market funds in the U.S. cut short-term holdings of European bank debt last month to the lowest levels ever recorded by Fitch Ratings.

Investments in certificates of deposits, commercial paper and other short-term debt issued by European lenders declined to 42.1 percent of the funds’ holdings in August from 47.2 percent a month earlier, according to a Fitch report. That’s the lowest since Fitch started compiling the survey in 2006.

“Market pressure on short-term liquidity is in general a concern, but it has to be considered in the context of each bank’s broader current funding and liquidity dynamics,” Fitch analysts including Robert Grossman said in the report.

Investments by money-market funds in French banks on a dollar basis declined 19 percent in August, while holdings of U.K. bank debt fell 14 percent, according to the report.

Funds increased their exposure to German banks by 8 percent, and by 4 percent in Nordic banks.

The report is based on public filings released by money market funds that oversee $676 billion of assets, about 45 percent of the total held by money-market funds in the U.S.

To contact the reporters on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.