By Philippe Herlin – Researcher in finance / Contributor to Goldbroker.com Along with its public deficits going the wrong way, as we wrote about last week, France has now to contend with its banking sector. According to Euromoney, a study from the Center for Risk Management de Lausanne shows that french banks represent the most important systemic risk of Europe!
In order to evaluate this systemic risk, the Lausanne institute measured the amount of capital a bank would need if a global financial crisis were to occur, such a crisis being defined by a 40% fall of major stock indices within six months. Credit Agricole SA (EPA:ACA) comes in first, needing 86 billion euros, followed by Deutsche Bank AG (NYSE:DB) (ETR:DBK) (82 billion),Barclays PLC (NYSE:BCS) (LON:BARC) (71 billion), and BNP Paribas (BIT:BNP) (EPA:BNP) (OTCMKTS:BNPQY) (68 billion). Societe Generale SA (EPA:GLE) comes in sixth, Natixis 13th and AXA Insurance 14th. And, although Dexia is considered a belgian bank, France guarantees 45.5% of its assets. All in all, french banks would need up to 217 billion euros in such a situation! They are followed by th