Sarkozy presses banks to keep lending to business

By Yann Le Guernigou

PARIS (Reuters) - French President Nicolas Sarkozy warned banks that have benefited from billions of euros in government support in the financial crisis not to cut off lending to businesses in need of cash.

"I am calling on banks to accept their responsibilities," Sarkozy said in a speech to regional finance officials meeting in Paris on Thursday.

"Those who took on all that risk yesterday should not become so cautious today that we have an economic crisis to follow on from the banking crisis."

With growing signs that the financial crisis that has rocked markets is spilling over into the real economy, officials have been concerned about the prospect of banks sitting on the liquidity released in public rescue programmes instead of keeping up lending to business.

The French state has already earmarked 360 billion euros to prop up the financial sector, as part of an international effort to help banks survive the worst financial crisis since the Great Depression in the 1930s.

Sarkozy said Rene Ricol, the former head of the International Federation of Accountants who has been named as national credit mediator, should not hesitate to expose "unacceptable credit restrictions."

"We'll compare who's doing their job and who isn't," he said.

STRATEGIC FUND