NEW YORK (CNNMoney) -- As the European debt crisis heated up, fund managers started moving money market funds out of European banks, with the French banks feeling the biggest impact.
By the end of August, 10 of the top U.S. money market funds by dollars had reduced their exposure to European banks by 8% from July. Between the end of May and the end of August, European banks lost 27% of their dollars from mutual funds, according to data compiled by Fitch Ratings.
"The drops we've seen in June, July and August will probably continue into September," said Alex Roever, head of short-term fixed income at JPMorgan Chase. "It would take some sort of broader political solution in Europe to stabilize the banks before you would see money market money move back into the European banks."
French banks have taken the biggest hit. Money market dollars allocated to French banks between July 30 and August 30 dropped 19%, and 34% between the end of May and end of August.
As U.S. money market funds have shifted out of European banks, many of those European institutions have struggled to maintain their U.S. dollar holdings.
