September 29, 2008 / 4:41 PM / 11 years ago

Sarkozy pledges French bank support, calls meeting

MARSEILLE, France (Reuters) - President Nicolas Sarkozy repeated on Monday a pledge to protect French bank deposits from any losses in the financial market crisis, and called a meeting of bank and insurance bosses to discuss the situation.

France's president Nicolas Sarkozy delivers a speech during a news conference at the end of the EU-India summit in Marseille September 29, 2008. REUTERS/Jean-Paul Pelissier

“We must not give way in the face of destabilization. We have to support the banks,” he told a joint news conference with Indian Prime Minister Manmohan Singh and European Commission President Jose Manuel Barroso.

The comment came as shares in French bank Dexia sank on a report that it might need emergency capital and after a string of bank rescue deals in the Benelux countries, Britain and Germany.

Earlier on Monday, Sarkozy’s office announced that he had summoned the heads of the main French banks and insurers to a meeting at the Elysee Palace “aimed at reviewing the situation of financial institutions as well as the distribution of credit to households and companies.”

The meeting would be held on Tuesday at 0830 GMT and would also be attended by Bank of France Governor Christian Noyer, Economy Minister Christine Lagarde and Prime Minister Francois Fillon, a statement from his office said.

Speaking in Marseille, he said intense contacts between European capitals had been underway to discuss the crisis.

He also confirmed a promise he made in a speech last week in the city of Toulon that he would ensure that French depositors did not lose a single euro if any French bank got into trouble.


“We worked very hard this weekend,” he said. “There have been multiple contacts between the different European governments. The situation requires rapid reactions. Everybody must show calm and a sense of responsibility. What I said in Toulon, I confirm today.”

French ministers have repeatedly said domestic banks were less vulnerable to global financial market turmoil than their U.S. counterparts but Sarkozy has adopted a more urgent tone since his speech in Toulon last week.

On Monday, he repeated his call for a meeting of world leaders to set the global financial system on a sounder footing.

“I confirm my appeal for a summit in the coming weeks to set the foundations for a new international financial system,” he said, adding that a meeting of the leaders of Britain, France, Germany and Italy would be held to establish the agenda.

A summit of European Union leaders on October 15 would also naturally discuss the crisis, said Sarkozy, whose country holds the rotating EU presidency.

European Commission President Barroso also welcomed the $700 billion U.S. rescue plan and backed Sarkozy’s call for an international meeting to discuss a broader response to the crisis.

“President Sarkozy and myself are in the process of preparing some initiatives that we may be able to present to the European Council on October 15,” he told the news conference.

In addition to the short-term emergency measures being implemented, it was essential to formulate a “structured European response” to the crisis. “It is the only way to ensure that stability and confidence can return,” he said.

Additional reporting by Francois Murphy and James Mackenzie in Paris; editing by David Stamp

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