BNP executive tipped as front-runner to head Bank of France

Tue Apr 21, 2015 6:32am EDT
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By Leigh Thomas

PARIS (Reuters) - Top BNP Paribas (BNPP.PA: Quote) banker Francois Villeroy de Galhau emerged as a possible candidate to replace the retiring governor of the Bank of France on Tuesday as he was named to lead a new state-sponsored investment drive.

The naming of Villeroy de Galhau to a French public service role could help allay any domestic political objections further down the line to the Socialist government picking a commercial banker to replace Christian Noyer when he retires this year.

Yet daily Les Echos reported ECB President Mario Draghi had been surprised to learn in recent days that a BNP banker could get the job as he expected ECB Executive Board member Benoit Coeure, a French national, to get it.

Villeroy de Galhau will step down as one of the two chief operating officers at France's biggest bank to lead the newly-created investment mission, the government said in a statement.

It said the job would entail seeking to ensure that French and European companies, particularly smaller ones, derive full benefit from the low-interest-rate environment.

France has for months called for euro zone monetary policy to do all it can to support a tentative recovery and has loudly applauded the gradually weakening of the euro and the low cost of borrowing.

As a close lieutenant of Draghi, Coeure has played a vital role drafting the ECB's quantitative easing program and has been a forceful advocate of easier monetary policy.

Asked to comment on the implications of Villeroy de Galhau's appointment, an official in President Francois Hollande's office said only: "Nothing more to add from us".   Continued...

BNP Paribas Chief Operating Officer Francois Villeroy de Galhau speaks during a news conference to present the bank's 2014 annual results in Paris, February 5, 2015.   REUTERS/Gonzalo Fuentes