Oct. 17 (Bloomberg) -- French banks should be able to meet higher capital requirements mostly through retained earnings, Bank of France Governor Christian Noyer said.
They should be able to do it “essentially through retained earnings,” Noyer told journalists in Paris.
Noyer also said the banks’ situation is different now than it was in 2008 because they haven’t taken major losses. “The big difference with two or three years ago is that we had losses in banks, they had toxic assets,” he said. “Now we’re not confronted with losses but with uncertainty in the markets.”
France’s banks have the capacity to absorb losses related to a Greek default, he added. The lenders’ combined exposure to sovereign debt in the euro area periphery is about 60 billion euros and its exposure to Greek sovereign debt is 8 billion euros, he said. They have combined tier 1 capital of 2010 billion euros, according to Noyer.
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