France To Apply EMU Stability Accord As Fast As Possible: PM

Author: Market News International | Category: News

— French Banks Aim To Boost Own Capital Without Public Aid

PARIS (MNI) – France is determined to go ahead with the Greek
bailout package agreed last week, Prime Minister Francois Fillon said
Wednesday in reaction to Greek Prime Minister George Papandreou’s
intention to hold a domestic referendum on the matter.

Speaking to the press after a meeting with leading French banks,
Fillon said the banks expected to be able fulfill the higher capital
targets agreed last week without public aid.

“Along with its partners, France remains determined to obtain the
full application of the accord” of October 27, which is “our joint road
map,” he said, noting that France aimed to implement the deal as soon as
possible.

French President Nicolas Sarkozy discussed the issue with German
Chancellor Angela Merkel on Tuesday and both will meet with Papandreou
and representatives of the European Commission and the IMF later this
afternoon in Cannes, Fillon noted.

Concerning the increase in their core tier 1 capital ratio to 9% by
June, French banks said they could meet the target without public aid by
mobilizing their profits and controlling their risks, Fillon said,
noting that they had already boosted own capital by around E50 billion
since 2008. The banks will present a plan of action by the middle of
next month.

Last month, the Prudential Control Authority of the Bank of France
estimated that the four largest French banks — BNP Paribas, Groupe
BPCE, Groupe Credit Agricole and Societe Generale, which represent 80%
of the French banking sector, needed a total of E8.8 billion in
additional base capital in order to reach a core tier 1 capital ratio of
9%, including a security cushion of E3.5 billion for exposure to
sovereign debt.

Fillon estimated the additional capital needs at “a bit more than”
E8 billion. He said that French banks intended to apply the higher
capital ratios in the Basle III accord well in advance of the deadline
by 2013, Fillon noted.

— Paris bureau; +331 4271 5540; email: ssandelius@marketnews.com

[TOPICS: M$F$$$,M$X$$$,MT$$$$,M$$CR$,MGX$$$]

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose