Wall Street Journal
October 3, 2011
A senior European Central Bank official said on Monday that concerns are exaggerated over French banks' exposure to the sovereign debt of fiscally challenged countries such as Greece, Spain and Ireland.
"Total exposure of major French banks to the sovereign risk of so-called 'peripheral countries' amounts to...only a limited fraction of their core tier one capital," said Christian Noyer, a member of the ECB's board of governors and governor of the Bank of France.
French banking stocks have suffered sharp falls in recent weeks after Moody's Investors Service downgraded its debt ratings of Societe Generale SA and Credit Agricole SA last month. The downgrades and sharp market moves have taken place as European leaders continue to struggle to curb further contagion of sovereign debt woes to the financial sector.
But rather than the exposure concerns, Mr. Noyer emphasized that French banks have actually been facing "real" vulnerability due to their dependence on dollar funding. Speaking at a seminar in Tokyo, Mr. Noyer said this vulnerability is "currently being dealt with through a combination of deleveraging and consolidation."
More
No comments:
Post a Comment