Singapore's Citigroup, DBS maintain credit lines with French banks

Citigroup Inc. and DBS Group Holdings announced that they haven’t cut credit lines to French lenders.

The groups were responding to speculation that some banks are becoming reluctant to lend to them amid Europe’s sovereign debt crisis.

Citigroup “has not cut credit lines to French banks,” James Griffiths, a Hong Kong-based spokesman of the US bank.

“As part of our overall risk management framework, DBS has assessed the potential risks relating to a debt crisis in the euro zone,” said Glendy Chu, a spokeswoman for Singapore-based DBS, Southeast Asia’s biggest bank.

Financial markets are overreacting to concerns that French banks might suffer from investments in their nation’s sovereign debt, said Charles Dallara, managing director of the Institute of International Finance, which represents more than 400 banks and insurers. France, Spain, Italy and Belgium will impose bans on short-selling from today, two days ago after European bank shares hit their lowest level since April 2009.

“Our holding of European sovereign papers is negligible,” Chu of DBS wrote in an e-mail. “We are comfortable with our current exposures and we will continue to keep a close watch on the situation going forward.” 

The full story is available at Bloomberg.