French banks could cope with a significant Greek "haircut"—a private sector writedown of Greek bonds—but it is still possible that the country's financial institutions may have to be recapitalized, Christian Noyer, governor of the Bank of France, told CNBC.
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Bank of France governor Christian Noyer leaves the Elysee Palace after a meeting with French President Nicolas Sarkozy about the financial crisis.
"Greece is not a problem for the French banks," Noyer said. "The total (exposure) of the French banks to Greek sovereign debt is significantly smaller than the first half of profits for the French banking system."
That exposure amounts to roughly 8 billion euros, while French banks' first-half profits totaled about 11 billion euros.
Still, Noyer would not rule out recapitalization for banks in France, given that all of Europe's banks' could face mandatory increases to their required capital base, depending on a decision by the European Bank Authority (EBA), the European Union's banking regulator.
"The EBA is working on that. We will see ... the final results," he said. "It is possible that French banks will have, as others, to reinforce their capital in the coming months, but my assumption is that they will be able to do that by essentially capitalizing in reserves the profits they will make (over) the quarters," he said.
Noyer added that the European Financial Stability Facility (EFSF), a fund created by euro zone member states to assist member countries facing financial crisis, could be used to recapitalize European banks.
Euro zone leaders agreed in July to boost the size of the EFSF's capital guarantee from 440 billion euros ($610.5 billion) to 780 billion euros ($1.08 trillion).
Noyer said he is confident that euro zone leaders will be able to develop a plan of action to tackle the area's ongoing debt crisis before the G20 meeting scheduled for Nov. 3 in Cannes, France. European markets have rallied in recent weeks, pinning their hopes on such a plan by that time.
"We are very confident that we are going to have a package," he said, one that is "based on a credible solution for Greece. It will be based also on a strong European stability fund ... with a strong capacity to act. It will also incorporate strengthening the levels of capital ... of the banking system."