(Adds quotes, details)
* European debt crisis threatens global economy
* Policymakers often struggle to reach consensus on crisis
* Euro's future is optimistic due to price stability-Noyer
* French banks' sovereign exposure limited-Noyer
By Stanley White and Rie Ishiguro
TOKYO, Oct 3 (Reuters) - European Central Bank member Christian Noyer said on Monday it is unrealistic to expect an increase in Europe's bailout fund beyond what was agreed in July, but that he is open to schemes that would allow leveraging to expand capacity.
Noyer, also head of the French central bank, said French banks have been slow to lower their dependence on dollar funding, but their exposure to debt from European countries with weak finances is small compared to bank capital.
Governments in Europe are passing measures to expand the 440 billion euro European Financial Stability Facility (EFSF) bailout fund by allowing it to make precautionary loans, help recapitalise banks and buy government debt in the secondary market.
This likely won't be enough as Europe's debt crisis has worsened since the European leaders first agreed the measures in July, economists, traders and the International Monetary Fund have said.
"Whether amounts are big enough is a matter of opinion," Noyer said in a speech.
"It would be unrealistic to expect an increase in the EFSF itself but I am personally open to any scheme that would allow existing commitments to be leveraged to provide greater intervention capacity."
Some European finance ministers have resisted a U.S. proposal to leverage the EFSF fund to expand its size even more.
Jitters over the spiralling European debt crisis, European banks' exposure to sovereign debt and a slowing global economy caused investors to slash their bets on risky assets in the July-September quarter, sending the common currency down almost 10 cents versus the dollar over the period.
Euro zone finance ministers meet this week to discuss more ways to help Greece, but few in the market are expecting aggressive measures to ring-fence other countries should Greece default on its debts.
Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that drastic steps taken to avert bankruptcy may not be enough.
Speculation is rife that the French government may have to recapitalise the country's banks due to their holdings of Greek debt. These concerns are "exaggerated," Noyer said, as French banks' exposure to peripheral European debt is 60 billion euros, which is only a small fraction of core tier 1 capital.
"There is a certain paradox in a situation where globalised banks, with diversified activities and balanced business models are perceived as riskier than more specialised institutions."
The euro has been under selling pressure due to the sovereign crisis and lost 7 percent in September for its largest monthly drop in almost a year.
However, the future of the euro is optimistic, because lenders will trust currencies that are managed with a focus on price stability, which will protect the currency's intrinsic value, Noyer said.
The Swiss National Bank's decision to cap the Swiss franc at 1.20 per euro is also a sign of confidence in the single currency, Noyer said.
There's no data that suggests that weak public finances in some European countries are inevitable, Noyer said. The argument that some countries need to devalue their currency to improve competitiveness also does not apply, he said.
The standard solution for many European countries is to return to a significant primary budget surplus and for governments to provide a liquidity backstop to prevent a negative spiral where rising yields fuel fears of default, Noyer said. (Editing by Tomasz Janowski)