December 18, 2017 / 10:14 AM / a year ago

Central banker wants French banks to help drive European M&A

FILE PHOTO -- Governor of the Bank of France Francois Villeroy de Galhau attends a press conference after the Franco-German Financial Council meeting in Berlin, Germany, September 23, 2016. REUTERS/Axel Schmidt/File Photo

PARIS (Reuters) - France’s central bank governor urged French banks on Monday to play an active role in what he said was the necessary consolidation of Europe’s fragmented banking sector.

Bank of France head Francois Villeroy de Galhau said a deal this month on international bank capital rules had lifted uncertainty that many banks had said discouraged them from pursuing tie-ups.

“It (the deal) clarifies the rules of the game for the next years... That means that banks know on what basis they can build their strategy for the next 10 years,” Villeroy told BFM Business radio.

“The time has come for them, for French banks and perhaps several others, to take up again the path of European consolidation,” he added.

Since the end of the 2008-2009 financial crisis, European banks have largely ignored calls to merge from some central bankers, who think that consolidation would make it easier to transmit monetary policy more evenly across the euro zone.

Reporting by Leigh Thomas; Editing by Dominique Vidalon/Keith Weir

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