The market for corporate borrowing through commercial paper expanded by the most in more than two months, led by an increase in issuance by foreign financial institutions, even as Europe's fiscal turmoil spreads.

The seasonally adjusted amount of U.S. commercial paper climbed $20.1 billion to $1.003 trillion outstanding in the week ended yesterday, the third consecutive rise, the Federal Reserve said today on its website. It's the biggest advance since a $27.2 billion increase for the period ended May 16 and the highest level since the week ended June 27.

Issuance has risen even as demand from U.S. money-market funds, among the biggest investors, has declined amid concern that Europe's debt crisis will infect bank balance sheets globally. European Central Bank President Mario Draghi said today policy makers will do whatever is necessary to preserve the euro, suggesting they may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc.