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PARIS, April 29 (Reuters) - Sanctions against banks and insurers in France are likely to take a back seat this year as Paris prepares to hand over financial supervision to the European Central Bank (ECB) and regulators focus on stress-testing the bloc's banks.
Responsibilities are still being worked out between ECB headquarters in Frankfurt and other European capitals, but the head of the French financial watchdog's sanctions committee suggested that staff transfers ahead of planned euro zone banking union will push domestic regulation down the pecking order.
The ECB, in conjunction with national supervisors, is scrutinising the banks' books in a so-called asset quality review and testing their ability to withstand a swathe of economic and financial shocks before it takes over as supervison of the euro zone's largest banks in November.
"National structures will be preserved, but the division of labour is being worked out from a practical point of view," Remi Bouchez, head of the ACPR's sanctions committee, told Reuters.
"Some of our colleagues are moving to Frankfurt ... and if you add the asset quality review, 2014 will be a year of transition and not a good harvest in terms of sanctions."
Reuters calculations show that the French ACPR's sanctions committee fined nine institutions a total of 15.4 million euros last year, including a 10 million euro ($13.8 million) fine attributed to the French arm of Swiss bank UBS.
The ECB said last week that it had finalised rules for how it will supervise commercial banks in the euro zone and Bouchez said that Frankfurt would eventually be able to manage sanctions procedures on its own or decide to mandate national regulators.
The ACPR incorporates three independent commissions in charge of banking and insurance regulation, the implementation of measures to wind down failing banks and sanctions.
The sanctions committee doubled the maximum fine it can levy to 100 million euros in 2010 but the biggest fines so far have been 10 million euros, including that for BNP Paribas's insurance arm Cardif Assurance Vie in April for failing to contact the beneficiaries of unclaimed insurance contracts.
BNP has declined to say whether it would contest the fine.
Bouchez would not rule out larger fines in the future but they would have to ramp up significantly to compare to the sort of sanctions levied in London, Europe's financial hub, or the United States, where fines can run to billions of dollars.
BNP Paribas France's biggest listed bank has set aside $1.1 billion for a possible fine for breaching U.S. sanctions on countries including Iran. ($1 = 0.7237 Euros) (Editing by Carmel Crimmins and David Goodman)