This will be positive as long as we can avoid the defaults we saw at the beginning of the crisis, which were created by vehicles that were opaque and complex and impossible for investors to understand. EUROWEEK: At the same time, presumably French banks should not be discouraged from using the skills of their derivatives technicians, which are recognised throughout the world? Noyer: I agree completely. That is why I have been reticent about the idea of separating investment banking and retail operations. I don’t think that is an appropriate concept. We live in a world where medium-sized and large corporates require access to bank lending for a large number of banking activities but also for market operations. Exporters, for example, also use the markets to hedge their risks – so they’re re-shaping the risk on their balance sheet by changing the structure of their liabilities or their assets if they have claims arising from trade. For all these activities and risks, giving corporates access to banks which are able to respond to their entire commercial and investment banking needs is crucial for the development of the economy. On the other hand, what we don’t want to see is banks embarking on proprietary trading which is totally disconnected from their banking activities. The ideal approach is to have a clear separation between what we in France call "purely speculative activities" – in America they would call it "prop trading" – and what is useful for the financing of the economy.
We may not have the entire panoply of banking strengths, but we have a number of very strong niches which will continue to make Paris a strong hub, which can and should continue to play an important role in the European financial services sector. EUROWEEK: At the same time, would you like to see the big French banks continue to be active on the global stage, where their experience has been mixed? They didn’t do very well in southern Europe, did they? Noyer: There was a time when there was a feeling in the market that we were going to move towards a return to more national banking system, which meant that international diversification was basically a weakness. Things have changed quite a lot and I don’t think anyone would argue that the move by BNP Paribas to acquire Fortis during the crisis was not a clever one. The French banks weren’t alone in believing that because we were supposed to have a single market in Europe, it was natural for banks to expand to neighbouring countries – just as it is natural for banks originally set up in Scotland to expand to England. So it was natural for French banks to see the eurozone and future euro area members in central and eastern Europe as their backyard. Yes, we had the Greek problem, which was painful and costly for Crédit Agricole. But this was really an extreme case and hopefully we’ll never see similar accidents again in our banking industry.