France's biggest listed bank BNP Paribas has suspended three of its funds due to problems in the US sub-prime mortgage sector.
BNP Paribas, the euro zone's second biggest bank by market capitalisation, said the sub-prime crisis was preventing it from calculating the value of the asset-backed securities funds.
BNP Paribas Investment Partners said the decision affected its Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia funds.
'The complete evaporation of liquidity in certain market segments of the US securitisation market has made it impossible to value certain assets fairly regardless of their quality or credit rating,' it said in a statement.
The bank said valuation of the funds would resume as soon as liquidity returned to the market.
Sub-prime mortgages are the riskiest property loans, often extended to people who have payment difficulties or a bad credit history. Several major US companies have announced losses from exposure to these sub-prime loans, causing a widespread fall in stock markets.
Traders said that the BNP Paribas statement had helped cause a drop in European stock markets in early trade.
