PARIS ? Societe Generale sought to calm investor fears over its exposure to Greek debt by releasing figures Monday detailing its exposure to the country and announcing plans to raise money quicker than planned.
French banks have been at the center of the European crisis because they hold a significant amount of debt from Greece and other struggling countries and there are fears that a default on that debt could drag the banks down, too.
Those concerns have only increased in recent days as Greece has struggled to convince its international creditors that it's cutting costs sufficiently. Some European officials have even begun to suggest that an orderly Greek bankruptcy may be the best solution. That, in turn, has raised the pressure on the banks.
Societe Generale shares were no exception, and plunged 10.8 percent Monday, even though its chief executive insisted that its exposure to risky debt was euro4.3 billion (euro5.8 billion) and negligible compared to the size of its holdings.
"The size of our exposure is small, declining, and completely manageable," CEO Frederic Oudea told reporters Monday.
Oudea noted that the bank has set aside enough money to cover losses if it has to write down Greek holdings by 35 percent. He said that even a writedown of 50 percent wouldn't be significant when compared to the size of the bank.
Concerns over the exposure of Europe's banks to Greek debt have made it hard for them to get the short-term loans they use to fund day-to-day operations. As a result, many have been forced to turn to the European Central Bank for their liquidity needs.
The European banks have also been accused of lacking enough money in reserve to weather significant losses.
The ratings agency Moody's warned earlier in the summer that it could downgrade French banks, including Societe Generale and cross-town rival BNP Paribas, because of these problems. BNP Paribas' shared also plummeted on Monday, closing down by 12.35 percent.
Oudea brushed off the possibility of a downgrade, saying it wouldn't affect "the company's perspective."
But he did seek to calm more general fears about the bank's health. In a statement, the bank said it has accelerated a plan to sell assets and build up capital and free up euro4 billion ($5.4 billion) in capital by 2013.
Oudea said many of those asset sales would be in areas that are out of sync with the company's overall business plan.
In an effort to show investors that Societe Generale was not hard up for dollars, Oudea noted that it had increased the amount of cash it keeps on hand at the U.S. Federal Reserve ? from $26 billion to $34 billion ? over the course of the summer.
He added that the company was reducing its need for dollars by getting rid of assets valued in dollars.
Oudea repeatedly told reporters that Societe Generale was on solid ground and that he thought all French banks were. He said that there were no conversations under way about government intervention in the banks.
Rumors a few weeks ago that European banks were struggling caused their share prices to plummet. In response, several European countries, including France, banned short-selling ? a bet that a stock will go down. Oudea said he was trying to avoid another flight from banking shares with his remarks Monday.
As he spoke, shares climbed off their lows from earlier in the day, but the stock was still down more than 10 percent.
Christian Noyer, the governor of the Banque de France, echoed Oudea's confidence in French banks.
"No matter what the Greek scenario and the provisions required, French banks have the means to face up to it," he said in a statement Monday. "The French banks have no liquidity or solvency problems."
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