Natixis economists Sylvain Broyer, Felix Eschwege, and Inna Mufteeva write in a recent special report entitled, "US money market funds: shifts in funding for French and European banks", "Prime money market funds' assets under management again fell from USD 1.542 trillion last May to USD 1.335 trillion at the end of October 2011. In the same month, these prime funds invested no more than USD 63 billion in French bank securities (CDs, CPs, repos and other instruments), amounting to USD 109 billion less than in June. Meanwhile, the average maturity of assets shortened from 40 to 14 days. This outflow is a reflection of the contagious effect of the sovereign debt crisis on banks in the eurozone. Since it is still less likely that a rapid solution to this crisis will be found as long as the ECB fails to decide upon mass purchases of sovereign debt, even sterilized, any return of short-term USD funding by the US money market funds to European and French banks would be unusual. Having built up their portfolios with dollar-denominated assets over the past few years, European banks are now more dependent on this dollar-funding than they were in the past." The Natixis study footnotes, "Our figures are based on data from Crane Data, a think tank specialized on US money market funds. Crane Data monitors around 94% of all ICI-covered MMFs and accounts for USD 2.452 trillion of assets under management at end-October 2011." In other news, ICI reports weekly "Money Market Mutual Fund Assets".
