France to raise bank capital buffer to 1% in December

France plans to double in December the amount of capital reserves banks have to keep on hand for a downturn in the economic cycle, the financial stability council said on Thursday.

The council said after a meeting it had left the countercyclical capital buffer at 0.5%, but would raise it to 1.0% at its next meeting unless there is an unexpected downturn in banks’ capacity to finance the economy in the meantime.

The council, which is chaired by Finance Minister Bruno Le Maire and includes the central bank governor, said all concerned banks already had sufficient capital on hand to meet the future requirement.