Woes in US mortgage markets reached into France today, with BNP Paribas SA joining the likes of Bear Stearns in halting three investment funds due to what it said was difficulty in valuing their holdings. Per Bloomberg:

BNP Paribas SA, France’s biggest bank, halted withdrawals from three investment funds because it couldn’t “fairly” value their holdings after U.S. subprime mortgage losses roiled credit markets. The funds had about 1.6 billion euros ($2.2 billion) of assets on Aug. 7, after declining 20 percent in less than two weeks, spokesman Jonathan Mullen said today … “The complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating,” BNP Paribas said in a statement. The European Central Bank today pumped 95 billion euros into the overnight lending market in an unprecedented response to a sudden demand for cash from banks roiled by the subprime collapse. BNP Paribas’s Chief Executive Officer Baudouin Prot said the bank’s exposure to U.S. subprime was “absolutely negligible” when the company reported a 20 percent increase in second-quarter net income last week … “On BNP’s scale this isn’t too significant,” said Benoit de Broissia, an analyst at Richelieu Finance in Paris. “It will impact clients. It’s more of an image problem.”

That insignificant little “image problem,” by the way, managed to evaporate 6.4 percent of BNP’s market cap in less than one day.