President Nicolas Sarkozy cut short his vacation and pledged to slash France’s huge debts but rising concerns about a cut to the country’s credit rating helped send bank shares plunging Wednesday afternoon.
Worries that France would lose its triple A rating sparked the selloff, which built momentum on rumors that the banks’ financial health was in danger.
Credit Agricole ended 11.8 percent down. Societe Generale said it “categorically denies” all market rumors but its shares closed 14.7 percent lower. Its market value has now fallen from over 40 billion euros at the beginning of July to 17 billion euros Wednesday afternoon.
The sell-off hit banking stocks across Europe, with leading banks in Britain, Italy and Germany also suffering large falls in their share prices.
Read Full Article Here