France's Prudential Supervision and Resolution Authority (ACPR) said on Tuesday
that banks' exposure to domestic public debt is limited and a spike in
government bond yields would not threaten financial stability. ACPR
secretary-general Emmanuelle Assouan told a Paris briefing she was reassured
about the impact of recent sovereign spread moves on banks, noting holdings are
modest and diversified. An ACPR report showed French banks will hold about
€190bn of domestic public debt in 2025, roughly 24% of their sovereign bond
holdings and about 2% of total assets. The comments come as the government seeks
to rein in the deficit and student protests in their third week refocus investors
attention on public finances.
