Bloomberg writes "Money Funds in U.S. Unfazed by Greek Crisis Watch Out for Spain Contagion". It says, "The European debt crisis would pose a threat to U.S. money-market mutual funds if a rash of sovereign defaults caused big banks to fail to meet obligations within the next three months." Bloomberg quotes Vanguard CIO George 'Gus' Sauter, "It would take a very rapid decline and not just in the smaller European countries" for the debt crisis to threaten U.S. money funds. "You'd probably have to see Spain and Italy get into difficult shape." The piece also quotes Alex Roever of JPMorgan Chase & Co., "It's not about whether Greece defaults, it's what happens after that, and there’s uncertainty behind that." Bloomberg continues, "JPMorgan's Roever and Peter Rizzo, senior director of fund services at credit rater Standard & Poor's in New York, said U.S. managers have been reducing their European bank holdings and shortening the average maturities of those remaining. That would allow them to withdraw more quickly without having to sell securities into a potentially illiquid market." They quote Federated Investors' Deborah Cunningham, "The risk is if something takes the crisis from Greece to Portugal, Ireland and beyond and it spreads like wildfire."
