March 8, 2019 / 7:30 AM / 3 months ago

France considering raising bank capital buffer: Villeroy

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) - French credit growth may be growing too quickly and France’s financial stability council is looking at whether banks should set aside more capital as a result, Bank of France Governor Francois Villeroy de Galhau said on Friday.

The council, which includes Villeroy, imposed a so-called counter-cyclical buffer of 0.25 percent on banks’ risk-weighted assets last June in the face of strong credit growth.

However, the move has done little to slow lending with credit growth currently at about six percent over one year annually, far outpacing growth in the broader economy.

“We already used once the countercyclical buffer in June last year, we are looking seriously whether it shouldn’t be raised,” Villeroy told French radio BFM Business.

Reporting by Leigh Thomas and Myriam Rivet; Editing by Sudip Kar-Gupta

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