Banking crisis: “No risk” for banks in France, assures the French Banking Federation

The president of the French banking federation, Philippe Brassac, assured this Saturday that the current banking turbulence in the world, which is affecting Credit Suisse particularly in Europe, is 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 witnessing and French banks,” the banker, chief executive officer of Crédit Agricole, told France Inter.

“French banks are very solid due to regulation” and “there is no mechanism, as there could have been in the past, of propagation”. Since the bankruptcy of Silicon Valley Bank (SVB) in the United States on March 10, and despite the bailout lines of the Swiss and American authorities, the banking sector fell back to the stock market on Friday, dragging all markets into the red.

Storm on the stock market: “There is confusion. When the value of a bank goes down or up, it doesn’t move the bank’s assets and its own solidity a bit”, he wants to reassure @PhilippeBrassac @FBFFFrance @Agricultural credit @France Inter pic.twitter.com/96iNqSHd9Z

— Alexandra Bensaid (@Alex_Bensaid) March 18, 2023

Like last week, fears center around Credit Suisse, one of 30 banks globally considered too big to fail, and which could be taken over in full or in part by the largest Swiss bank, UBS, from this weekend, in order to stop 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. “As far as American banks are concerned, there is no connection between the balance sheets”, and as regards 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 explained again.