PARIS: France's central bank governor railed on Friday against levies on banks, warning the measures could keep them from lending funds onwards to activities that support the country's broader economy, which is still close to stagnation.
French banks will have to contribute 15 billion euros ($18.7 billion) towards an EU fund being phased in to limit the fallout from a potential bank collapse.
Much to the anger of the French banking sector, the government said this week that neither those charges, nor a three-year-old systemic risk tax that the contributions will eventually replace, will be tax deductible.
"I understand French banks' concerns about growing domestic and international constraints that could hold back their activities," Bank of France governor Christian Noyer said in an interview with Les Echos business newspaper.
"They can't accumulate an overblown contribution to the single European resolution fund and a systemic tax, which moreover will no longer be deductible.
"Decisions need to be made quickly, otherwise it will have consequences on the cost and supply of credit," he added.
In a similar vein, he said a proposal for the world's biggest banks to hold additional buffers of bonds in case of a collapse had to be "reasonably calibrated" so banks are not discouraged from lending.
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