Hot pursuit

25 June 2012 By Agnes T. Crane

It’s hard to blame US money market funds for seeking safer harbors than the turbulent euro zone. Yet Canadian and Japanese lenders – as well as the National Australia Bank – must remember not to become too enamored with the attention from their fair-weather friends.

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Money market funds have increased their exposure to Japan by 80 percent and Canada by 23 percent over the last year as they cut their funding for European banks, according to a Fitch Ratings survey of the 10 largest money market funds which represent 45 percent of the $1.43 trillion market.

The National Australia Bank, Bank of Nova Scotia and Royal Bank of Canada are the most reliant on money markets, according to the study. As a percentage of total short-term funding, money market loans represent between 3.4 percent and 4.6 percent at these banks.
An earlier version of this item failed to make clear in paragraph four that Mary Schapiro chairs the SEC. The sentence has been rephrased.

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