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BNP Denies It Cannot Obtain US Dollar Funding

Embattled French bank BNP Paribas has been forced to deny rumors, published in The Wall Street Journal, that it has been struggling to gain dollar funding from U.S. money-market funds.

BNP Paribas
AP
BNP Paribas

An opinion piece by Nicolas Lecaussin, director of development at France's Institute for Economic and Fiscal Research, published on Tuesday, quoted an unnamed banker from BNP Paribas as saying: "We can no longer borrow dollars. U.S. money-market funds are not lending to us anymore."

The bank released a statement Tuesday saying, "BNP Paribas categorically denies the statements made by this anonymous source and confirms that it is fully able to obtain USD funding in the normal course of business, either directly or through swaps."

"BNP Paribas is surprised that The Wall Street Journal published this opinion containing both statements from an anonymous source, and a large number of unverified assertions and technical errors, without contacting the bank for verification."

BNP shares were trading lower in Europe.

The French banking sector has been struggling to shrug off persistent rumors about its solvency and its exposure to Greek debt. The three largest institutions—BNP Paribas, Societe Generale and Credit Agricole —are believed to hold almost 60 billion euros ($81 billion) of Greek sovereign and private debt between them.

Societe Generale and Credit Agricole declined to comment on the rumors.

Monday, markets reacted to a potential downgrade of the French banking system by Moody's, leading BNP Paribas to issue a statement reiterating its belief that it is adequately able to deal with the problems on the euro periphery. The bank said that it has exposures of 3.5 billion euros to Greek sovereign debt, after provisions of 500 million euros.

The day saw BNP Paribas, SocGen, and Credit Agricole shares down 12.35 percent, 10.75 percent and 10.64 percent, respectively, despite a statement released by Bank of France governor Christophe Noyer, which said that French banks had no liquidity or solvency problems, and were recapitalizing.

Contact Europe: Economy

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