The Economist. France Banking Tests and Lagarde France's Finance Minister

Take a look at this video: http://www.economist.com/blogs/newsbook/2010/07/stress_tests_europes_banks.

Christine Lagarde, France's Finance Minister comments that cutting costs will be  happening in France because of Politicians commitment, specially high level positions, as well as France does not want to be in the same position as it is Greece, and because France believes in organizing the economy by themselves and not getting instructions from outside.

It is interesting to understand which measures France will take to reduce economic crisis from the economic view, and how the Finance Minister does not really answer whether France Banking Tests are hard enough to fail the test. Communication of course is a major role when it comes to politicians, when it comes to express what one wants to say not want reporters wants Politicians to talk about it.

The article and its comments are interesting since sometimes are more related to France and its culture that to the issue itself which is Banks Tests and to some extent which are the measures that France or other countries will take to get rid of the economic crisis.

" Lagarde unstressed.  Jul 22nd 2010, 21:36 by The Economist online | LONDON AND PARIS

THIS week the International Monetary Fund urged Europe's bank regulators to disclose more detail of the "stress tests" being carried out on 91 of the EU's biggest banks, and on how individual banks scored in those tests. The fund also said they should be applied to a larger number of banks (its comments are in paragraph 26 of this PDF document). Some analysts are worried that the tests will be a whitewash, and that hardly any of the banks will be allowed to fail them: if so, this may defeat the entire purpose of the exercise—to reassure nervous investors that the European banking system is in good health.

The results of the tests are due to be announced on Friday evening but in an interview recorded this week, France's finance minister, Christine Lagarde, came close—as close as diplomatic niceties allow—to confirming that France's banks will all pass the tests. Talking to The Economist's Paris bureau chief, Ms Lagarde also discusses such matters as how the EU's fiscal-discipline rules could be enforced in future, and is coy about her personal political ambitions. But her comments on the stress tests are perhaps of more immediate interest: 

Christine Lagarde: "All I will say is that, number one, as far as my banks are concerned, the French banks, I am very confident about the results; and number two and probably more importantly, from what I have seen of the criteria, and the kind of tests that are applied to the 91 banks in Europe, it's a very tough standard that is applied. And I'm saying that because I have seen here and there some. you know, allegations, little hints, and, and, various comments, analysts saying 'Oooh, not so sure about the tests'. Well, let's go down to the details, the tests are really, really hard." 

The Economist: So hard that some will fail the test?Christine Lagarde: (smiles) "I'm not commenting, but all I can say is that I am confident about the French banks.""