France: Breaking the foreign taboo

It is a measure of the crisis gripping France's banking sector that two of the country's most respected financial institutions, Paribas and Banque Indosuez, have recently turned to US management consultancy McKinsey to advise them on restructuring their businesses. "This is breaking a taboo in a country as anti-American as France," jokes one investment banker. "They must have been pretty desperate to take such a step."Both banks are struggling with low profitability and the costly legacy of over-ambitious expansion strategies in the 1980s. But their decision to tackle these problems with restructuring plans designed by American consultants, stressing such Anglo-Saxon virtues as focus, profitability and management accountability, is seen as a sign that the ill-health of the financial sector is finally forcing French bankers to rethink the way they do business.Last year was another bad year for French banks and this one promises to be little better. Their profits continue...