Bank reform could damage Europe's growth, says BNP Paribas chief
Under siege? BNP Paribas's boss says Europe's economy could face a bad time
11 April 2012
Bank reforms could cost Europe six percentage points of economic growth, BNP Paribas's chief operating officer warned today.
The proposed tighter capital requirements, known as Basel III, would cost European banks 400 billion in extra capital and force them to issue 1.5 trillion in debt to finance lending, Jean-Laurent Bonnafe told French newspaper Les Echos.
"The impact could reach six points of growth," he said. "If Europe accepts this, it means either two guaranteed years of deep recession or four years of zero growth."
Basel III is expected to come into force in 2012 but the reforms are still at the consultation stage.
