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c*****r
发帖数: 8227 | 1 The Trouble With French Banks
A Bank Paribas executive makes his concerns known.
We can no longer borrow dollars. U.S. money-market funds are not lending to
us anymore," a bank executive for BNP Paribas, who declines to be named,
told me last week. "Since we don't have access to dollars anymore, we're
creating a market in euros. This is a first. . . . We hope it will work,
otherwise the downward spiral will be hell. We will no longer be trusted at
all and no one will lend to us anymore."
He's not the only one worried. France's three biggest banks have been the
subject of whisper campaigns about their solvency since the beginning of the
summer, and Société Générale has lost 22.5% of its value.
BNP, Société Générale and Crédit Agricole together hold nearly $57
billion in Greek sovereign and private debt, versus $34 billion held by the
largest German banks and $14 billion at British banks. French banks also
held more than €140 billion in total Spanish debt and almost €
400 billion in Italian debt as of December, according to the latest figures
from the Bank for International Settlements. If either of these latter two
governments were to default, their banking systems could collapse and take
the French system with them.
BNP, Société Générale and Credit Agricole all say that their finances
are in order and the market worries are unfounded. But it's difficult for
the BNP executive to hide his concern.
"Look at the French banks' debt holdings versus those of U.S. banks," he
continues. "The total debt of the three big U.S. banks (Bank of America, JP
Morgan and Citigroup) is $5.86 trillion, or 39% of GDP, while the debts of
BNP, Crédit Agricole and Société Générale come to €4.7 trillion,
or 250% of French GDP."
Analysts are suggesting that the government is set to start nationalizing
France's banks. The banks have remained silent on the matter, and the
government denies this talk. But the last time the French state intervened
in the banking system in a big way, the results were disastrous. As recently
as the 1980s, most French banks were owned by the state, and by the 1990s
the sector was bordering on bankruptcy. The French banking sector shrank by
nearly 50% during the decade, while the those in other countries such as
Britain and the U.S. grew by 39% and 50%, respectively.
The most famous case of that time was Crédit Lyonnais, which was plagued by
mismanagement throughout the 1980s and 1990s until it shifted its debts and
liabilities into a new state-owned company, the Consortium de Réalisation.
In 2003 Crédit Lyonnais was taken over by Crédit Agricole, but in July
2008 its bills came due anyway.
An arbitration court ordered the Consortium de Réalisation to pay €
240 million to the liquidators of the Bernard Tapie group, along with €
;105 million in interest and €45 million in moral damages—a total of
€395 million for one erstwhile borrower. Meanwhile, the SdBO (Western
Bank Corporation), a subsidiary of Crédit Lyonnais, lent sums to the Tapie
family that added up to more than two-and-a-half times the bank's total
capital. French taxpayers paid out more than €15 billion for the
mismanagement of Crédit Lyonnais over the years.
The taxpayer-backed losses of mortgage lender Crédit Foncier came to €
;2 billion. And the Hervet bank (now part of the HSBC group) announced the
first losses in its history after its 1982 nationalization.
These and other disasters were brought on by the bank nationalizations of
the early 1980s. But despite the subsequent privatizations, French bank
boards are still dominated by the alumni of France's famous ENA, the Ecole
Nationale d'Administration, and by officials who have worked at the Ministry
of Finance. A study by the Management Institute at the Université de La
Rochelle finds that between 1995 and 2004 banks administered by government-
linked technocrats were in greater total debt than those that were not.
Whether the market's worst fears are realized or not, French banks certainly
maintain an all-too-close relationship to the state. This opaque system
doesn't offer outsiders much visibility, save for the knowledge that
indebted banks and an indebted French state intend to continue to cover each
other, no matter the cost and on taxpayers' backs if they must. If U.S.
money-market managers no longer trust the French system, this is a glaring
reason why. The fastest way to regain their trust would be to end this
system. |
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