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If growth continues to slow down this won’t be nearly enough to cover capital yet to be lost.

Also, with more slowing, the French deficit widens threatening their solvency and ability to fund:

France injects €10.5bn in the six largest banks; doubts about the 2009 GDP growth forecast

The French Finance Ministry said Monday night that the French government will inject E10.5 billion worth of fresh capital into the country’s six largest banks between now and the end of the year by purchasing subordinated debt securities.

Credit Agricole will get €3 billion, followed by BNP Paribas with €2.55 billion, Societe Generale with $1.7 billion and Credit Mutuel with €1.2 billion. Les Caisses d’Epargne will get €1.1 billion and Banques Populaires €950 million.

The banks have agreed to sell subordinated debt securities in those amounts, and they will carry a risk premium of about 400 basis points.


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