Bank of France Increases Risk Provision by Half on CrisisMark Deen
The Bank of France boosted provisions for potential losses by 49 percent after increasing the size of its balance sheet as part of the European Central Bank’s crisis-fighting measures.
The Bank of France set aside 5.66 billion euros ($7.27 billion) in potential loss provisions in its annual accounts, up from 3.81 billion euros in 2011, Governor Christian Noyer told journalists in Paris today. Bond purchases under the aegis of the ECB helped lift net income to 3.15 billion euros from 1.57 billion in 2011.
“Our profit is up but a substantial part of this has been used to cover our increased risk,” Noyer said. “We need to have capital adapted to the risks we face.”
Germany’s Bundesbank said earlier this month that it increased provisions for general risks by 6.7 billion euros to 14.4 billion euros.
Noyer also said that the Bank of France had earned about 450 million euros in interest on its holdings of Greek government bonds. Those funds will be transfered to Greece through the French government under the terms of euro-area agreements, he said.