Election could herald French banking reforms

28 March 2012

Officials in the French banking industry are starting to make provisions for a potential raft of reforms following the country's upcoming presidential poll, analysts have said.

The French population is scheduled to vote in the second round of polling for this position on 6 May and, according to the Financial Times, the nation's financial sector could be set for wholesale changes depending on the outcome.

Socialist candidate Francois Hollande - who is favorite to defeat incumbent Nicolas Sarkozy in the election - has pledged to impose regulation whereby banks have to separate their retail business from investment banking activities.

This would represent a significant move away from France's current universal bank model and could see the revenue of lenders fall markedly.

And professionals at Credit Suisse have indicated in a note that the ongoing "uncertainty" over the election will "weigh on the performance of French banks" in the coming months.

By Claire Archer

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