Paris, France. Current French officials are growing uneasy that Marine Le Pen will win the upcoming elections and taking continuity steps to prevent any unintended unrest such a result may have nationally.
Possible scenarios include bank runs to credit crunches. French bank regulators and investors are asking French banks about their preparations for any market reactions that might be caused by Marine Le Pen winning in the presidential election, banking sources said.
Le Pen has said that if she becomes president she will call a referendum on ditching the euro, dubbed “Frexit”, finance state spending through central bank money-printing, force commercial banks to lend small firms and halve the maximum rates that banks can charge clients as part of her post victory plans.
Independent French polls indicate she has a good chance of coming out on top of the first round of voting on April 23, with her share of the vote projected at 35-40 percent. They now see her winning over centrist Emmanuel Macron in the May 7 runoff.
French bond yields spiked in February on poll gains by Le Pen, European Central Bank supervisors have sought to ensure banks have fully considered the risks of the unexpected, four senior bankers speaking on condition of anonymity due to the political sensitivity of the matter. “We’ve been asked what’s our plans for different scenarios including Frexit,” one of the bankers said.
Paris based lawyers reported they were getting questions from investors about whether it is legally possible for France to dump the euro, how the Frexit process might work and what France could do if a bank run resulted.
“What’s sure is that if there is a risk of a bank run and something needs to be done, the state can do it by decree,” one lawyer said, citing the example of Cyprus implementing capital controls when its banks faced collapse in 2013.
For now, French investors are keeping their money liquid with popular tax-free regulated savings accounts seeing large inflows in the last three months, said Pierre-Rene Lemas the head of the state-backed Caisse des Depots, which collects the money deposited in such accounts at banks as France prepares for a Le Pen presidency.