A potential $10 billion fine against BNP Paribas SA (BNP), France's biggest bank, for violating U.S. trade sanctions could have repercussions affecting the stability of Europe's financial sector, French President Francois Hollande warned ahead of his meeting with President Barack Obama.
U.S. authorities "must be fully aware of what is at stake from a sanction that would be not just unfair, but disproportionate, and with consequences well beyond a single French bank.
Other banks could be targeted, introducing a risk, doubts, suspicions about the soundness of Europe's financial system," Hollande said late yesterday at a press conference at the Group of 7 meeting in Brussels.
Hollande plans to use a working dinner in Paris tonight with Obama to press his U.S. counterpart over potential American penalties faced by BNP Paribas, one of Europe's biggest banks, which had net income of 4.83 billion euros ($6.6 billion) last year.
The two leaders will dine in a Paris restaurant before Hollande heads to a second dinner, with Russia's President Vladimir Putin, at the Elysee presidential palace.
State Visit
Talks about BNP with Obama began earlier this year, including in February during the French president's state visit to the U.S., Hollande said.
"I've had numerous exchanges" with Obama on BNP Paribas, "since I saw that there could be consequences -- that is, since the start of this year.
And we've had dialogues at all levels, not just between President Obama and myself, but also at the level of ministers, regulators, central banks. So cooperation has been established and we continue to talk."
Finance Minister Michel Sapin said that if BNP did break the law it should be punished, although the U.S. should take care not to impede the bank's ability to lend at a time when French economic growth has stalled.
"We're not trying to defend a bank" that may have broken the law, Sapin said. "We're there to protect the stability of our financial system.
"He added that France will "react firmly" if BNP isn't treated fairly.
Stock Rose
BNP rose for the first time in five days yesterday after the comments by Sapin and Hollande, climbing 1.2 percent to 51.50 euros.
The stock has declined 9.1 percent in 2014. U.S. authorities are seeking penalties to settle allegations that BNP transferred funds for clients in violation of American sanctions against Sudan, Iran and Cuba.
Prosecutors are also pressuring the bank to plead guilty and its dollar-clearing business may be temporarily suspended.
"We obviously want whatever it is to be fair and to reflect an appropriateness to whatever it is that is alleged to have taken place," U.S. Secretary of State John Kerry told reporters in Beirut yesterday, in response to a question.
"I'm not sure that it belongs in our comments publicly between the two countries. But I'm confident that it's something that we can work through and deal with."
Standard & Poor's said yesterday it may lower BNP's long-term credit rating, currently A+, depending on the outcome of the investigation. The rating company cited the possible impact on the bank's capital and disruption to some of its banking activities.
Earnings Threatened
A $10 billion fine could more than wipe out this year's earnings for BNP, estimated at 5.64 billion euros by analysts. It would also represent more than three times the combined fines paid by HSBC Holdings Plc (HSBA), Standard Chartered Plc (STAN) and ING Groep NV (INGA) in 2012 for sanctions violations.
Bank of France Governor Christian Noyer, speaking on May 23, said that U.S. jurisprudence on such matters has evolved in recent years and that BNP has complied with all European and French laws.
Noyer and other members of the European Central Bank's governing council are meeting in Frankfurt to set monetary policy for the countries that share the euro. ECB President Mario Draghi holds a press conference at 2:30 p.m.
yahoo.com
U.S. authorities "must be fully aware of what is at stake from a sanction that would be not just unfair, but disproportionate, and with consequences well beyond a single French bank.
Other banks could be targeted, introducing a risk, doubts, suspicions about the soundness of Europe's financial system," Hollande said late yesterday at a press conference at the Group of 7 meeting in Brussels.
Hollande plans to use a working dinner in Paris tonight with Obama to press his U.S. counterpart over potential American penalties faced by BNP Paribas, one of Europe's biggest banks, which had net income of 4.83 billion euros ($6.6 billion) last year.
The two leaders will dine in a Paris restaurant before Hollande heads to a second dinner, with Russia's President Vladimir Putin, at the Elysee presidential palace.
State Visit
Talks about BNP with Obama began earlier this year, including in February during the French president's state visit to the U.S., Hollande said.
"I've had numerous exchanges" with Obama on BNP Paribas, "since I saw that there could be consequences -- that is, since the start of this year.
And we've had dialogues at all levels, not just between President Obama and myself, but also at the level of ministers, regulators, central banks. So cooperation has been established and we continue to talk."
Finance Minister Michel Sapin said that if BNP did break the law it should be punished, although the U.S. should take care not to impede the bank's ability to lend at a time when French economic growth has stalled.
"We're not trying to defend a bank" that may have broken the law, Sapin said. "We're there to protect the stability of our financial system.
"He added that France will "react firmly" if BNP isn't treated fairly.
Stock Rose
BNP rose for the first time in five days yesterday after the comments by Sapin and Hollande, climbing 1.2 percent to 51.50 euros.
The stock has declined 9.1 percent in 2014. U.S. authorities are seeking penalties to settle allegations that BNP transferred funds for clients in violation of American sanctions against Sudan, Iran and Cuba.
Prosecutors are also pressuring the bank to plead guilty and its dollar-clearing business may be temporarily suspended.
"We obviously want whatever it is to be fair and to reflect an appropriateness to whatever it is that is alleged to have taken place," U.S. Secretary of State John Kerry told reporters in Beirut yesterday, in response to a question.
"I'm not sure that it belongs in our comments publicly between the two countries. But I'm confident that it's something that we can work through and deal with."
Standard & Poor's said yesterday it may lower BNP's long-term credit rating, currently A+, depending on the outcome of the investigation. The rating company cited the possible impact on the bank's capital and disruption to some of its banking activities.
Earnings Threatened
A $10 billion fine could more than wipe out this year's earnings for BNP, estimated at 5.64 billion euros by analysts. It would also represent more than three times the combined fines paid by HSBC Holdings Plc (HSBA), Standard Chartered Plc (STAN) and ING Groep NV (INGA) in 2012 for sanctions violations.
Bank of France Governor Christian Noyer, speaking on May 23, said that U.S. jurisprudence on such matters has evolved in recent years and that BNP has complied with all European and French laws.
Noyer and other members of the European Central Bank's governing council are meeting in Frankfurt to set monetary policy for the countries that share the euro. ECB President Mario Draghi holds a press conference at 2:30 p.m.
yahoo.com
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