UPDATE 1-ECB's Noyer prods French financial sector over Euronext

Thu Jan 16, 2014 1:14pm EST

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PARIS Jan 16 (Reuters) - France's financial sector should use the impending spin-off of stock market group Euronext as an opportunity to enhance Paris' status a financial centre and boost the economy, the governor of the Bank of France said on Thursday.

French regulators have for months been pushing banks and insurers behind the scenes to take a large stake in Euronext, which is due to be spun off in a 1 to 1.5 billion-euro ($1.4-$2.0 billion) listing following the merger of ICE and NYSE.

"To meet the appropriate aim of financing the economy ... I can only encourage the (French) financial sector to seize opportunities to boost its financial infrastructure," said Noyer, who is also a member of the European Central Bank's governing council, in a speech to the industry.

"I'm thinking in particular about the sale of Euronext, which opens the way for it to be taken over by long-term investors."

The financial institutions in question, which include BNP Paribas and Societe Generale, are unenthusiastic about such a plan, bankers have told Reuters, citing frustrations over France's tax on financial transactions and the prospect that the eurozone will also impose one.

Earlier on Thursday, SocGen Deputy Chief Executive Severin Cabannes said it was too early to take a position.

Although he said that France's financial sector was open to a "European solution" to the Euronext question, he stressed that the competitiveness of the French market was the number-one issue.

The purchase of a stake in Euronext was not on the list of recommendations issued by French finance lobby Europlace on Thursday to put Paris back on the map after years of losing ground to London, Singapore and other global financial hubs.

But the lobby did say that France should create its own clearing-house for transactions, at a time when derivatives are set to move increasingly onto regulated exchanges from over-the-counter trades. It also called for a lighter tax load for banks.

"Most over-the-counter derivatives will end up as listed, so a clearing-house may make sense," Yannick Naud, portfolio manager at Sturgeon Capital, said. But he said that making Paris more attractive as a financial centre would need more measures and more time.

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