Are French banks in danger?

The financial crisis generated by toxic products has already affected a substancial amount of financial groups. The crisis might have reached its peak last week, with the collapse of Lehman Brothers. Who could have guessed that a couple of monthes ago? Even Morgan Stanley is currently about to disappear. What a big mess!

Due to this increasingly unsecure environment, consummers are more and more scared. How can they trust their bank after all these issues and dramas?

In France people are starting to raise some interrogations; they are wondering whether their money is really in a safe place. So here is the point: how healthy is the French banking system? What is the difference between French and US system?

The major difference between those two systems is based on an organisationnal criterion. On the one hand the French system is based on a universal bank, meaning that all the different activities are made by the same bank. On the other hand the US system consists in diffenciating different types of activities. Thus investment banks, such as Lehman Brothers and Morgan Stanley, cannot benefit from cash deposits. They have got to find their funds on specific markets. Therefore a credit crunch can affect a US investment bank much more sharply than a Universal bank.

Finally French banks appear to be better builted to face the current financial crisis. However French consummers should'nt be oversatisfied neither! Although their bank should not collapse, they will still suffer a bit from the crisis: credit crunch, decreases in shares value...