Bank of France head reassures after SocGen fraud

By Anna Willard and Francois Murphy

PARIS (Reuters) - France's central bank sought to reassure depositors and investors on Thursday that a 4.9 billion euro fraud at Societe Generale was no threat to the country's second largest bank or the broader financial system.

Bank of France governor Christian Noyer said SocGen's problems were down to a single "genius of fraud" and stressed that the bank was in a solid financial position after a capital increase of 5.5 billion euros to cover the loss.

"The bank is even safer and stronger than it was before," Noyer said after a news conference. "There is absolutely no problem from the point of view of all the clients, all the counterparties and all the savers. No risk at all."

Noyer told reporters he only found out about the crisis last weekend and was then kept regularly updated.

"I was alerted as soon as SocGen had identified the problem during the course of the weekend," he said.

The International Herald Tribune last Friday reported Noyer as saying, without directly quoting him, that he had been assessing the balance sheets of banks like SocGen and BNP Paribas before they revealed their 2007 results.

Noyer's office later denied that he had referred to any specific bank in the interview and the IHT withdrew the phrase.

Asked on Thursday whether he had known about the crisis when the interview was conducted on January 17, he said: "No, absolutely not, because it was information from the weekend."