France hits back at mooted US mega fine on BNP Paribas/AFP
France hits back at mooted US mega fine on BNP Paribas/AFP
PARIS, June 3- France, trying to minimise US penalties against BNP Paribas bank on charges of breaking sanctions, said a reported $10 billion fine was “unreasonable” and warned it could affect trans-Atlantic trade talks.
The remarks from French Foreign Minister Laurent Fabius ramp up French concern at the size, manner and likely effects of the expected fine.
Meanwhile the New York Times newspaper reported that the governor of the Bank of France, Christian Noyer, had visited top US officials on the case in New York last week to warn that such a fine, equivalent to 7.4 billion euros, could have grave effects on the financial system.
President Francois Hollande has also recently raised concerns about a plea deal with the White House, the paper wrote.
In the first public comments by a senior French official on the high profile charges that the bank broke sanctions against Iran, Sudan and Cuba, Fabius said in a television interview that the figure sought by the US was not justified.
“If there was a fault, then it is normal that there be a sanction, but the sanction has to be proportionate and reasonable. These figures are not reasonable,” he said.
France would defend the bank he said, adding that the dispute “raises a very, very big problem.”
“Meanwhile, we are in the process of discussing a trans-Atlantic partnership with the United States.
“This trade partnership can be established only on a basis of reciprocity. But here, we would have the example of an unjust and unilateral decision. So it is a serious and grave problem.”
Fabius was referring to the fifth round of negotiations on a free trade agreement between the European Union and the United States which was held in Washington on May 19.
“One cannot consider that reciprocity must be the rule if, at the same time, there is a decision like this. So, it is very serious and furthermore, when one looks at the role of Paribas which is the leading European bank, the figures mentioned, which are absolutely unreasonable, could have a considerable negative knock-on effect.”
“If Paribas had its capital amputated, that would mean fewer loans to businesses, notably French ones.”
The New York Times newspaper reported that the governor of the Bank of France, Christian Noyer, had visited New York last week to argue on behalf of BNP Paribas and to warn that such a big fine could have serious effects on the banking sector.
– Major repercussions –
Noyer, who is the highest banking regulatory official in France and also sits on the policy-making body of the European Central Bank, met state and federal prosecutors in New York, the newspaper reported, citing people close to the matter.
Noyer stressed the case could have major repercussions both for BNP, the biggest French bank by capitalisation, and the global economy.
French officials are concerned that as part of a guilty plea, the bank might be forced to suspend a core business operation in New York, which could erode BNP’s bottom line, the Times wrote.
It appears likely that the bank might be banned for a limited period from carrying out transactions in dollars, which could drive away part of its international client base.
Noyer was accompanied by the new French banking regulator Edouard Fernandez Bollo who has been the head of the French prudential and control body ACPR since the beginning of this year.
Fernandez Bollo had already visited New York the previous week but had been unable to change the attitude of the US authorities, the report said.
