Hollande seeks to widen BNP fine debate
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[June 05, 2014]
By Yann Le Guernigou and
PARIS/BRUSSELS (Reuters) -
French President Francois Hollande sought to widen the
basis of his fight against a possible $10 billion U.S.
fine facing bank BNP Paribas ahead of a meeting with
Barack Obama on Thursday, warning of "consequences
across the euro zone".
Hollande was speaking to reporters after a G7 summit in Brussels
late on Wednesday, and ahead of a dinner with the U.S. president
after Thursday's D-Day 70th anniversary ceremonies.
He has already said he will raise with Obama the issue of what he
has called a "disproportionate" fine facing France's biggest listed
bank, confirming that he wrote the White House a letter on the
subject in April, and discussed it by telephone.
Sources have said U.S. authorities are seeking a $10 billion penalty
for alleged breach of U.S. sanctions via money transfers involving
countries including Iran, Sudan and Syria.
Hollande said he accepted that the U.S. justice system was
independent but "at the same time we have a relationship between the
United States and France, a partnership, and nothing should be
allowed to compromise that."
Asked whether the BNP Paribas affair could affect trade talks
between the two countries, he said: "We are engaged in other
discussions and we expect reciprocity and respect." He added that
the affair "could have economic and financial consequences across
the euro zone".
Late on Wednesday, U.S. Secretary of State John Kerry said the case
and any penalty were a matter for the justice system. However,
speaking on a visit to Beirut, he told reporters: "We obviously want
whatever it is to be fair and to reflect an appropriateness to
whatever it is that is alleged to have taken place."
Concern is growing at a European level about the scale of U.S. fines
such as the one BNP Paribas may face. The affair comes after Credit
Suisse pleaded guilty earlier this year to helping Americans evade
taxes and agreed to pay $2.5 billion.
Hollande's comments about a wider euro zone impact follow the
intervention of European Banking Authority (EBA) chairman Andrea
Enria on Wednesday.
Enria told Reuters the rising penalties faced by some lenders had
become a concern generally for regulators, and should be factored
into this year's "stress test" of banks' financial health.
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"The point of conduct risks, and of the impact of these fines and
penalties ... on a bank's capital position, is a concern," Enria
BNP has declined to comment on any details of discussions but has
said it is in talks with U.S. authorities about "certain U.S. dollar
payments involving countries, persons and entities that could have
been subject to economic sanctions".
It has set aside $1.1 billion for a fine, but told shareholders it
could be far higher than that. It has also said it has improved
control processes to ensure such mistakes do not occur again.
French Finance Minister Michel Sapin also weighed in on the subject
on Thursday. "Paying for the past would seem to be legitimate, but
paying for the future would seem illegitimate," he told reporters.
Responding to questions about whether he was talking about the risk
that BNP Paribas could face a loss of its U.S. banking license, he
added: "This is about all aspects (of the case)... There are other
aspects in particular that touch on the bank's ability to work in a
certain place or to act in a certain currency which, if they are
excessive, would be unfair."
(Reporting by Yann le Guernigou and Ingrid Melander in Paris and
Julien Ponthus in Brussels; Writing by Andrew Callus)
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