Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > ETFs > Broad Market

U.S. Money Funds Cut French Lending by 44%

By Marlene Y. Satter

X
Your article was successfully shared with the contacts you provided.

The eight biggest U.S. money market funds slashed their lending to French banks in September by a staggering 44% overall, with some bank holdings falling even further as worries over the eurozone debt crisis multiplied.

The Thursday Bloomberg Risk newsletter figures revealed that the funds’ holdings in BNP Paribas, Société Generale, Natixis and Credit Agricole dropped to $23.2 billion at the end of the month, from August’s total of $41.5 billion. Natixis was the biggest loser, down 74%, with Credit Agricole next at 64%. Société Generale was down 51% to $3 billion; BNP Paribas dropped 20% to $14.8 billion. The funds have also reduced their holdings in KBC Groep, the biggest lender in Belgium, by 80% to $587 million.

Over the last year, Société Generale funding from U.S. money market funds has dropped 83%; BNP Paribas has fallen 40%.

The funds control $592.4 billion in assets among them and disclose holdings each month; the report cited figures based on the most recent portfolio disclosures by Fidelity Cash Reserves Fund, JPMorgan Prime Money Market Fund, Vanguard Prime Money Market Find, Fidelity Institutional Money Market Portfolio, Fidelity Institutional Prime Money Market Portfolio, BlackRock TempFund, Wells Fargo Advantage Heritage Money Markets Fund and Federated Prime Obligations Fund.

Worries over the ability to access wholesale markets has led the funds to slash loans; that in turn has driven European Union banks to seek short-term cash from the European Central Bank.

A report by Huw van Steenis, an analyst at Morgan Stanley in London, was quoted saying, “There has been a substantial decrease in access to the wholesale funding markets whether for money market funds, debt security issuance or securitization. Banks expect that funding markets will continue to deteriorate albeit at a slower pace.”

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.