French bank boss says eurozone crisis has peaked

by Robert Peston

BBC News
January 26, 2012

On the official second day of the World Economic Forum here in Davos, I have just interviewed Baudouin Prot, the chairman of BNP Paribas, the huge French bank which is seen as one of Europe's stronger banks.

He had two or three pretty interesting claims to make - though I should say at the outset that not everyone will agree with him.

First he is convinced that the worst of the eurozone crisis is behind us - thanks in part to the massive injection of three-year loans into the eurozone banking system by the European Central Bank, which I have been banging on about for weeks here and which certainly reduces the risks of bank collapses.

He also regards the bloodless coup of the technocrats in Italy, which saw the economist Mario Monti taking over as premier, as a "game changer" - because it introduced credible economic governance to Italy.

That said, he's not saying all dangers are passed. A default by Greece would not be fatal for the eurozone, he said, but would make investors in general more risk averse - so he would prefer default were prevented.

But he reiterated what others have said about the negotiations between the Greek government and its private sector creditors, which is that the banks and other lenders have made all the concessions they can in respect of the terms they can accept for a reduction in what Greece repays them.

Which rather implies that default remains a very real danger.

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