* Bank says it has 60 billion euros short-term dollar
* Shares close up 7.2 pct
(Adds Wall Street Journal declined to comment)
By Elena Berton
PARIS, Sept 13 BNP Paribas denied it
had funding problems, helping shares in France's largest listed
bank and its rivals storm back in another roller-coaster session
on Tuesday that failed to quiet investors' longer-term worries.
France's largest listed lender, which along with Societe
Generale and Credit Agricole has seen its
shares hammered in recent weeks on concerns about capital levels
and liquidity, said it is funding itself perfectly normally in
dollars, both directly and via currency swaps.
Having incurred early losses of up to 10 percent, its shares
closed up 7.2 percent. BNP shares had plunged after a Wall
Street Journal opinion column cited an executive of the bank as
saying it no longer had access to dollar funding.
BNP responded by saying it had 60 billion euros ($81.7
billion) in short-term dollar net funding below one year as of
Sept. 9, as well as abundant euro funding and 135 billion euros
in assets eligible to central banks.
The bank said it "categorically denied" the anonymously
sourced Wall Street Journal column and later said it had asked
French market watchdog AMF to open an inquiry into the story.
The Wall Street Journal declined to comment.
French banks have been trying to fight back against negative
media coverage as their shares have plunged in recent weeks.
SocGen has said it is pursuing legal action against UK tabloid
the Mail on Sunday over a story last month that alleged the bank
was on the verge of collapse.
The denial, along with reports about a meeting
between French President Nicolas Sarkozy and German Chancellor
Angela Merkel, and a possible conference call on Wednesday with
Greek Prime Minister George Papandreou, ignited shares in SocGen
and other banks.
SocGen, which on Monday hit its lowest level since the 2009
recession, led the risers, with shares up 15 percent, while
Credit Agricole gained 6.7 percent. The Stoxx 600 bank index
closed 3.6 percent higher.
Despite the rebound, investors remain nervous and continue
to price in a potential ratings downgrade and French government
intervention, said one analyst who spoke on condition of
"At these very low prices investors are
discounting extreme scenarios," he said.
French bank share prices have rapidly declined
since the start of summer, leading to speculation about funding
difficulties and French government intervention to recapitalise
One analyst also cited broader worries about the French
government's ability to get a handle on its debt burden.
"French banks were still perceived as a safe haven, simply
because of the triple A (rating) of France," said Antonio
Guglielmi, an analyst at Mediobanca.
"Now that the rating is under scrutiny, the market is
realigning the valuation to the rest of the sector."
(Reporting By Elena Berton; Additional reporting by Christian
Plumb and Jennifer Saba; Editing by Christian Plumb and Mike