FRANCE: French shares and the euro come under pressure as uncertainty over the shape of Cyprus' bailout plan spooks markets

Record ID: 863250

  • Title: FRANCE: French shares and the euro come under pressure as uncertainty over the shape of Cyprus' bailout plan spooks markets
  • Date: 18th March 2013
  • Summary: TRADERS AT DESKS (SOUNDBITE) (French) MONTSEGUR ASSET MANAGER FRANCOIS CHAULET SAYING: "On the scale of Europe, the stakes in Cyprus are particularly low. The problem is one of image: the signal that is being sent to the rest of the world is that there are eurozone countries that, despite pressure from the European Central Bank, have found a slightly brutal means of taking money on the accounts of savers. It's a bit of a stain on the reputation of the European banking system, even if it concerns a very small amount of capital and people. Once again, on the scale of Europe, it's a very small contributor." SCREENS (SOUNDBITE) (French) MONTSEGUR ASSET MANAGER FRANCOIS CHAULET SAYING: "There are other countries where the banking sector is still in difficulty and where one could imagine there would be the risk of another bank run. Especially in Greece, some savers could go to the bank and try to withdraw funds massively, just in case this kind of measure was put in place there. That doesn't really seem plausible to me." SCREENS (SOUNDBITE) (French) MONTSEGUR ASSET MANAGER FRANCOIS CHAULET SAYING: "Forty percent of bank deposits are banking deposits that derive from Russian savings. And I think that's one of the reasons why this mode of levy directly on client accounts was chosen. It's a way of bringing into play capital that is not always licit that are on this little island that is Cyprus." SCREENS OFFICE
  • Embargoed: 2nd April 2013 13:00
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  • Location: France
  • City:
  • Country: France
  • Topics: Economy,Politics
  • Reuters ID: LVACBIWSAZ1BUBMMUGEBBGG33I0E
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  • Story Text: French stocks and the euro were under pressure at the midsession on Monday (March 18), mirroring other financial centres in Europe, where worries about the timing and extent of the Cyprus bailout were depressing prices across the board.
    By 1030 GMT, the CAC 40 index of leading shares stood at 3789.66, a fall of 1.41 percent -- less than in Milan and Madrid, where stocks were down 2.3 and 2.22 percent respectively -- hit by worries as Cyprus tried to re-work a divisive bank tax as part of a 10-billion-euro bailout.
    The weekend announcement that Cyprus would impose the bank account tax broke with previous practise that depositors' savings were sacrosanct and sent a shiver across the currency bloc, causing the euro to tumble.
    "On the scale of Europe, the stakes in Cyprus are particularly low," said Francois Chaulet, an asset manager with Montsegur Finance in Paris.
    "The problem is one of image: the signal that is being sent to the rest of the world is that there are eurozone countries that, despite pressure from the European Central Bank, have found a slightly brutal means of taking money on the accounts of savers. It's a bit of a stain on the reputation of the European banking system, even if it concerns a very small amount of capital and people. Once again, on the scale of Europe, it's a very small contributor," he added.
  • Copyright Holder: REUTERS
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