France to inject billions into biggest lenders

NP Paribas SA, Societe Generale SA and four other French banks will get 10.5 billion euros from the government, tapping for the first time the 360 billion-euro state rescue package unveiled this month.

The government will subscribe to subordinated debt issued by the country's six biggest banks, without acquiring voting rights, Finance Minister Christine Lagarde said at a press conference in Paris on Monday. In exchange, the banks will have to boost lending to companies and households, she said.

"It's a balanced approach," said Gilles Moec, an economist at Bank of America Corp in London. "The government wants to avoid a contraction in the French credit markets at all costs. The banks now have more than enough to protect themselves from the risks that have paralyzed them since the summer."