The president of the French Banking Federation, Philippe Brassac, assured on Saturday that the current banking turmoil in the world, which is hitting Credit Suisse in particular in Europe, was not likely to contaminate the banking sector in France.
“There is no risk because there is no possible contagion mechanism between the events we are seeing and the French banks,” the banker, managing director of Crédit Agricole, told France Inter. “French banks are very strong due to regulation” and “there is no mechanism, as there may have been in the past, for propagation”.
Since the bankruptcy of Silicon Valley Bank (SVB) in the United States on March 10, and despite the lifelines of the Swiss and American authorities, the banking sector relapsed on the stock market on Friday, dragging all the markets into the red.
As in the past week, concerns center on Credit Suisse, one of 30 banks globally considered too big to fail, and which could be taken over in whole or in part by the biggest bank. Swiss, UBS, from this weekend, in order to stop the panic.
“Almost all French banks are subject to specific prudential rules” such as capital requirements, liquidity, interest rate risk management, listed the representative of French banks.
“With respect to US banks, there is no link between the balance sheets”, and with regard to Credit Suisse, “there is no possible contamination”. Indeed, “since 2008 […], the big banks no longer have the ability to connect with each other through monetary loans as we did in the past”, Philippe Brassac further explained.
