Fitch: US money funds dip toes back into Europe

[October 29, 2012]  FRANKFURT, Germany (AP) -- The big U.S. money market funds are loaning more to banks in the 17-country eurozone as fears ease over the continent's debt crisis.

Fitch Ratings says the 10 largest U.S. funds increased their exposure for the third straight month in September.

The funds now have 10.6 percent of their holdings in credit to European banks, up 16 percent from August.

The ratings agency says that's because actions by central banks have reduced turmoil and volatility in the financial system. The European Central Bank has said it is willing to buy the bonds of indebted governments on financial markets, lowering their borrowing costs and the chance they might default. The U.S. Fed is also buying financial assets.

Still, exposure to Europe remains far below what it was before the crisis.

[Associated Press]

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