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French banks plan for Greek exit

French banks, which are among the lenders most exposed to Greece, have stepped up their efforts on contingency plans for the debt-laden country leaving the eurozone, sources familiar with the situation said.

The heightened preparations by banks, including Credit Agricole, BNP Paribas and Societe Generale, come after eurozone sources told Reuters earlier this week that each member of the common currency would have to prepare a plan for a possible Greek exit.

“Every bank has a task force right now looking at the potential consequences of a return to the drachma,” a Paris-based banker said. At end-Dec 2011, total French cross-border lending to Greece was $44.4 billion, higher than Germany’s $13.4 billion, according to preliminary Bank for International Settlements data tracking consolidated foreign claims of reporting banks on an ultimate risk basis.

“The banks are doing contingency planning concerning a Greek exit, but you can understand why they wouldn’t say so publicly,” a consultant to French banks said.

An investment banker who advises European banks said French lenders had all stepped up their contingency preparations for a Greek pull-out at regulators’ request over the past two weeks.