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Market Turmoil Boosts Flow Volatility of Bank Deposits, Money Fund Assets
While recent bank failures, rising rates and a weakening economy have created considerable headwinds for U.S. banks, asset quality, regulatory capital, funding and liquidity levels should allow them to withstand near-term challenges, Fitch Ratings says. U.S. money market funds (MMFs), have benefitted from corresponding inflows, although the looming Treasury debt ceiling and the impacts of bank-sector stresses on underlying fund investments are headwinds for Treasury/Government and prime MMFs, respectively. Nevertheless, the potential impacts for MMFs are viewed as within ratings expectations. For U.S. banks, funding ... (full story)