Potential changes to certain banks' ratings due to declining sovereign support could further constrain the universe of investable assets for MMFs, according to Fitch Ratings' 1Q14 U.S. money market funds quarterly report.
Sovereign support has historically been correlated to both bank and financial institution default risk, so changes in sovereign support could potentially have a meaningful impact on the ratings of certain banks, notably in the U.S., EU and
Separately, as managers have gained more comfort with the Treasury FRN program, MMFs have been increasing allocations, to 38% of the total offered in March.
The full report, 'U.S. Money Market Funds Quarterly 1Q14', is available at 'www.fitchratings.com'.
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Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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