Nearly half of US mutual fund assets are invested in European banks, some of which face big losses in case of a Greek default. Banks could see their ratings downgraded after a Greek default.
Forty-four percent of mutual fund assets in the U.S. are invested in the short-term debt of European banks, according to a report from Fitch.
A separate report from Moody's noted that 55 percent of those holdings are in the commercial paper of French banks, such asSociete Generale, BNP Paribas [BNP-FR 51.11 -0.19 (-0.37%) ] and Credit Agricole. French banks are some of biggest creditors to Greece, with over $53 billion in outstanding loans to the Greek government and private sector.
While fund managers have had plenty of warning of the potential of a default in Greece, many would likely still be caught off guard. Many fund managers assume that a bailout will prevent a default by Greece.