US funds reduce exposure to French banks: Fitch
US funds reduced their exposure to French banks by 19.0 percent in August from the July level, Fitch Ratings said on Friday, amid concern over bank exposure to eurozone debt.
Since the end of May, US fund exposure to French banks had fallen by 34.0 percent, Fitch said.
Based on a sample of the 10 biggest US monetary funds, the note indicated that US fund exposure to French banks fell from 14.1 percent of total exposure at the end of July to 11.2 percent of the total by the end of August.
In general US funds had cut back their financing for European banks. US fund exposure to European Union financial institutions fell by 8.0 percent in August and by 27.0 percent since the end of May, Fitch said.
US fund exposure to British banks fell by 14 percent in August and 22 percent since May.
By contrast, US funds increased their exposure to German banks by 8.0 percent in August from the level in July.
US funds also tended to shorten the duration of their financing for European banks, often to seven days or less.
Despite the fall in exposure and length of loans, French banks remained the top borrowers from US monetary funds, accounting for 11.2 percent of the ttoal provided by the funds, Fitch said.
Last week, amid reports that Europen banks and particularly French banks were having difficulty in obtaining dollar financing from their usual sources of dollar funds, leading central banks announced they would make dollars available, to relief strains in the system.
© 2011 AFP