Fitch Ratings placed six South African funds' National Fund Credit Ratings on Rating Watch Negative (RWN). They are: Absa Money Market Fund; Investec Money Market Fund; Investec STeFI Plus Fund; Nedgroup Investments Core Income Fund; Nedgroup Investments Money Market Fund; and STANLIB Extra Income Fund. The brief says, "The RWN is driven by these funds' exposure to African Bank (unrated) following the bank's receipt of emergency support on 10 August 2014 from the South African Reserve Bank. As a result holders of senior and wholesale debt instruments issued by African Bank have had their holdings written down to 90% of face value while subordinated instruments have been written down to zero. The RWN reflects both the realised write-down on African Bank debt instruments and the potential for further credit deterioration or negative effects on instrument prices. It also affords Fitch time to determine the most appropriate way to incorporate African Bank's evolving credit risk profile into its rating analysis. The downgrade of the Absa Money Market Fund reflects the impact of the write-down of the fund's African Bank exposure on its price and income. Of the money market funds (MMFs) rated by Fitch in South Africa, Absa Money Market Fund has the highest, longest-dated exposure to African Bank. The fund recognised a capital loss because of its application of regulatory guidance on the treatment of African Bank exposures. Fitch considers the level of loss incurred inconsistent with a highly rated, stable unit value, MMF." In other news, The New York Fed, which held a workshop on the risks of wholesale funding last month, had a summary post on their Liberty Street Economics blog. It says, "The Federal Reserve Banks of Boston and New York recently cosponsored a workshop on the risks of wholesale funding. Wholesale funding refers to firm financing via deposits and other liabilities from pension funds, money market mutual funds, and other financial intermediaries. Compared with stable retail funding, the supply of wholesale funding is volatile, especially during financial crises."

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