French Banking System Is Healthy

According to a government spokesman last week the French banking system is healthy and well able to avoid chain-reaction failures.

"We have the good fortune in France of having a banking system which is healthy and averts these chain reactions," he said, reporting on a meeting of the government.

"It is the world financial system which is showing all its limits through this crisis."

France holds the presidency of the European Union and ministerial meetings.

The announcement was made after two days of crisis on global financial markets marked by the collapse of U.S. bank Lehman Brothers Holdings Inc. (LEH) Monday and the rescue of the American International Group Inc. (AIG) insurance group by the U.S. authorities overnight.

Earlier, French Finance Minister Christine Lagarde said on French 24 television: "We are seeing a transformation of financial markets, of the role of people in finance and of bodies overseeing finance."