PARIS, Sept 12 (Reuters) – Growing fears of a Greek default
sent a hurricane through heavily exposed French banks on Monday
and hit the euro as investor confidence in the European currency
area’s ability to surmount a sovereign debt crisis ebbed.
Shares in Societe Generale , BNP Paribas
and Credit Agricole slumped by more than 10 percent
amid expectations of an imminent downgrade by credit ratings
agency Moody’s, due largely to their exposure to Greek bonds.
The shock resignation of European Central Bank chief
economist Juergen Stark last Friday, and weekend comments by
German politicians suggesting Athens may have to default and be
“suspended” from the euro zone, drove the euro to a
10-year low against the yen and a 7-month low against the
The storm forced SocGen, the hardest hit French lender in
recent weeks, to announce further drastic measures it denied
only last week were under consideration, speeding up asset
disposals and deepening cost cuts.
SocGen shares are now trading at a historic low of 15.55
euros, after losing more than two-thirds in seven months. Since
mid-2007 the bank has seen 52 billion euros ($71.3 bln) wiped
off its market value, which today stands at 13.5 billion –
smaller than spirits group Pernod Ricard or fashion
house Christian Dior .