October 21, 2011 7:17 pm
French banks urged to raise Greek debt haircut
By FT reporters
The French stock market regulator has advised French banks to take bigger losses on their holdings of Greek government bonds, arguing that the relatively small writedowns announced in recent months were now seen as insufficient.
French banks have more cross-border exposure to Greece than any other country, mainly through subsidiaries owned by Crédit Agricole and Société Générale. BNP Paribas holds the most Greek sovereign bonds among private sector investors, with €4bn of exposure.
Many analysts expect the banks to take a bigger haircut when they report their third-quarter earnings next month. BNP Paribas has already said that a 55 per cent impairment would lead to a provisioning of €1.7bn, on top of the €534m taken at the end of the first half.