French banks told to reinforce risk management

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PARIS - Christian Noyer, head of the French banking commission, has stated that even though recent stress tests demonstrate the solidity of French banks, the uncertainty surrounding the global financial crisis requires a reinforcement of risk management measures.

Noyer, who is also a European Central Bank governing council member, has confirmed that the banking commission will be keeping a close eye on the development of more appropriate risk management techniques at French banks. He also urged the need for banks to employ more regular stress tests using macroeconomic scenarios and to reinforce the conditions of their own stress tests. Corporate governance practices and compensation packages will also be watched by the Commission to ensure banks do not return to a system that encourages excessive risk-taking.