The 10 biggest prime U.S. money market funds cut their holdingsof debt issued by euro-area banks by $8.3 billion in May asconcerns mounted that the 17-country currency union could breakup.

The funds reduced holdings of Dutch banks by $3.3 billion lastmonth, while those in German banks declined by $2.9 billion and inFrench banks by $2 billion, according to data compiled byBloomberg. Funds increased holdings issued by Japanese, U.S. andU.K. banks by a combined $11.2 billion.

Holdings of debt from European banks, including those outsidethe euro region, have fallen every month since the end of January,with a combined decline of $20 billion over the period to $178billion. Elections in Greece have fueled concern that the countrymay exit from the euro, and Spain this month requested as much as100 billion euros ($126 billion) from European Union rescue fundsto recapitalize its banks. The country's credit rating this weekwas cut three steps by Moody's Investors Service, which cited thenation's debt burden.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
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.