SocGen CEO Dismisses Rumors, Says France Is Not US
Societe Generale's CEO dismissed rumors that France's second-largest bank was in trouble and blamed the recent downgrade of the US credit rating for fueling speculation that France might lose its Triple-A status as well.
"I find it a bit surprising [that] just because one country is downgraded by one notch at the end of the day that others should follow," Frederic Oudea told CNBC Wednesday. "It’s a strange way to think about the situation in the economy."
Societe Generale's stock plunged Wednesday despite the bank's denial of rumors that its exposure to other European countries threatened its financial stability. Global financial stocks also skidded on worries about the world-wide banking system, fueling the huge selloff on Wall Street.
Oudea said the rating agencies confirmed France's rating, and so long as France continues to "have an economy that is a balanced one and a government that wants to reduce the public deficit," there's no reason for that rating to change.
"We're in good hands," he said of French President Nicolas Sarkozy's government.
While reiterating his defense of France, Oudea restated that Societe Generale has "limited exposure" to banks in Spain and Italy and is on pace to have enough capital set aside to meet Basel III solvency requirements by the end of 2013.
He would not comment on "stupid and unfounded rumors" about the bank's largest shareholder, European insurer and asset manager Groupama, on whether it needs to raise cash, which in turn could affect the bank's solvency.
He said he has asked French authorities to investigate how that and other rumors got started today.