March 18, 2020 / 9:30 PM / 12 days ago

French banks in no need of nationalisation - Bank of France chief

PARIS, March 18 (Reuters) - French banks can weather the current economic storm unleashed by the coronavirus outbreak and are in no need of nationalisation despite the recent collapse in their share prices, the head of France’s central bank said on Wednesday.

French Finance Minister Bruno Le Maire said on Tuesday the government was prepared to inject capital into strategic companies and even nationalise them if necessary in the face of the financial market fallout from the outbreak.

France’s biggest listed banks - BNP Paribas, Credit Agricole and Societe Generale - have suffered sharp drops in their share prices in tandem with the broader market plunge.

“All of the big French banks are in a solid situation and none needs nationalisation. There’s no doubt about it,” Bank of France Governor Francois Villeroy de Galhau said in an interview with Les Echos business newspaper released late on Wednesday.

He added that both their solvency and liquidity was much more favourable than it was in 2008 as the global financial crisis broke out and there were no tensions on interbank funding markets as back then.

France’s financial stability board, which is headed by Le Maire and Villeroy, gave extra breathing space on Wednesday by giving banks the go ahead to release countercyclical capital cushions they had been required to build for rainy days like now. (Reporting by Leigh Thomas Editing by Chizu Nomiyama)

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