BNP Paribas says ready for new Greek debt write-down

21st September 2011, Comments 0 comments

The head of BNP Paribas said Wednesday the bank would accept a fresh write-down of Greek debt if all private investors do the same, but applying the July 21 eurozone rescue plan was still the priority.

"I think that applying the July 21 plan remains the priority," BNP Paribas chief executive officer Baudouin Prot told French radio of the second bailout for debt-stricken Greece agreed by leaders of the 17-nation eurozone in July.

But "if there were to be a further effort by all private investors, for BNP Paribas, I would say we're ready," Prot said.

Banks holding Greek debt in July collectively accepted an initial 21-percent cut in the amount Greece must repay on its debt as part of the eurozone financial rescue package.

The share values of major French banks, including BNP Paribas, have fallen sharply in recent weeks amid ongoing speculation about their exposure to the debt of fragile eurozone nations because of fears of a default.

The banks have denied that they are at risk, although in early trading Wednesday shares in BNP Paribas fell 5.48 percent, Societe Generale 1.90 percent and Credit Agricole 2.20 percent

French Budget Minister Valerie Pecresse also defended French banks, insisting in an interview on Wednesday that they do not need recapitalising, after the European Commission changed tack and said such a move was necessary.

"French banks have no solvency or liquidity problem," Pecresse told BFM TV channel. "French banks are solid."

Pecresse rejected the idea of recapitalising French banks, as has been suggested by International Monetary Fund head Christine Lagarde and echoed by the European Union Commission.

"French banks don't need further recapitalising. Since 2008 they've raised their funds by 50 billion euros," Pecresse said.

EU Competition Commissioner Joaquin Almunia said on Tuesday: "Unfortunately, with the worsening of the sovereign debt crisis, more banks will perhaps need to be recapitalised," on top of the nine that failed stress-tests in July.

© 2011 AFP

0 Comments To This Article