A major bank in Singapore has cut credit lines to some French lenders, and other Asian banks are considering the same, sources tell Reuters.
The action was precipitated by a false rumour that France would lose its AAA credit rating yesterday. Today’s selloff is keeping the pressure on.
“We’ve cut,” said Reuters’ anonymous source at the Asian bank who has cut credit lines to major French banks. “The limits have been removed from the system. They have to seek approval on a case-by-case basis.”
No word yet on which bank is doing the cutting.
Representatives from other Asian banks told Reuters that risk officers automatically reevaluate a bank’s counterparty risk if their shares fall sharply, much as those of Societe Generale did yesterday.
Though not crashing like yesterday, shares of BNP Paribas, SocGen, and Credit Agricole are down 4.61%, 4.64%, and 1.55%, respectively, in trading this morning.