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French business chief dismisses IMF chief's bank call
August 30, 2011 / 8:15 AM / in 6 years

French business chief dismisses IMF chief's bank call

PARIS, Aug 30 (Reuters) - The head of France’s business federation on Tuesday slammed IMF chief Christine Lagarde’s call for a forced recapitalisation of European banks.

Lagarde, who replaced former IMF head Dominique Strauss Kahn in late June as head of the International Monetary Fund, called at the weekend for urgent action to counter global economic risks.

“(Her) declaration is completely incomprehensible. European banks are solid ... and as for French banks, it has to be said that our banks are among the most solid in the world,” Laurence Parisot, head of France’s principal business lobby, MEDEF, told Europe 1 radio.

Speaking at Jackson Hole in the United States on Saturday, Lagarde warned the global economy could sink back into recession and called for a mandatory recapitalisation of European banks, through private channels or using public Europe-wide funding.

Her comments drew immediate criticism from the European Commission, which stressed there was no need for a recapitalisation over and above what has already been done.

Parisot dismissed the idea of using public funds to boost bank capital, and said that it was U.S., not European banks, that had triggered the 2008 financial crisis. (Reporting by Thierry Leveque and Vicky Buffery; Editing by Patrick Graham)

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