A day after the French government said it would inject a second €10.5bn ($13.5bn) of capital into the country’s banks, Christian Noyer, chairman of the Banking Commission, the banking regulator, said French banks did 'not really' need the money.
At a conference in Abu Dhabi yesterday, Noyer said French banks were 'sound and robust and still exhibit high solvency ratios'. The state financial support was aimed at anticipating potential problems and not addressing actual shortfalls, he explained.
Yet financial markets do not seem to be listening. Shares in BNP Paribas and Société Générale have dropped 29% and 27% respectively in the past two weeks, though there was some bounce back yesterday. This is still better than the FT Eurofirst bank index – but only by about 5%.