French banks can cope with any Greek outcome: bank governor
French banks are strong enough to cope with any outcome of the debt situation in Greece, French central bank governor Christian Noyer said on Monday after French bank shares plunged.
"Whatever the Greek scenario, and therefore whatever the provisions which have to be made, French banks have the means to cope," Noyer said in a statement by the Bank of France.
Top French bank shares were showing falls of about 10.0 percent on concern that Moody's credit rating agency may downgrade ratings, notably for Societe Generale bank, because of the large amount of Greek debt bonds they hold, and over concerns about their access to funds.
But Noyer insisted in his statement: "French banks have neither concerns about liquidity nor a problem of solvency."
On liquidity Noyer, who also sits on the policymaking council of the European Central Bank, said that a cushion of 5,000 billion euros (6,800 billion dollars) was available to banks in the eurosystem.
"Today the eurosystem refinances banks to the extent of about 500 billion euros," he said.
As the financial crisis turned into a eurozone debt crisis, the ECB extended special easy-terms short-term financing for banks in the eurozone, and particularly for those in Greece, Ireland and Portugal.
© 2011 AFP