Goldman Sachs and Citigroup 'increased exposure to France'

15 August 2011

Goldman Sachs Group and Citigroup both upped their exposure to French banks prior to the country's financial decline.

The two lenders boosted their ties to the nation in the first half of 2011 before its stocks plummeted due to fears over its perceived dependence on short-term funding, Bloomberg reports.

Claims by Goldman Sachs were increased by 31 per cent to $38.5 billion across the period, while Citigroup, which is organised into two major segments - Citicorp and Citi Holdings - elevated its cross-border outstandings with banks from the European country by 40 per cent to reach $15.7 billion.

Andrew Karolyi, a finance professor at Cornell University, said: "There is a great cloud of uncertainty that's hanging over the US banks about the full extent of the exposures they have to French and other European banks."

He added the market is failing to react well to the events it is witnessing.

By Asim Shah

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