PARIS |
(Reuters) - French banks may be among the most exposed in Europe to tighter capital requirements due in 2012, despite having emerged relatively unscathed from the global financial crisis.
Fears that stricter guidelines will leave French banks like Credit Agricole (CAGR.PA) and Natixis (CNAT.PA) short of billions of euros in core capital have hurt their share valuations and are likely to persist until more clarity emerges.
France is not alone. Banks across Europe are expected to need $65 billion (42.2 billion pounds) in fresh capital to meet so-called "Basel III" proposals, according to one study by UBS. The proposals are still at the consultation stage.
But Credit Agricole and Natixis seem more exposed than many others because of their cross-shareholdings in regional and cooperative banks, which Basel may disqualify as core capital.
"The market has priced in more risk for the capital of cooperative banks than for other banks," said Vincent Durel, a Fidelity fund manager who manages some 300 million euros (265 million pounds) in assets.
