Safe haven

German engineering giant Siemens withdrew over 500 million euros in cash deposits from a large French bank two weeks ago and deposited the funds at the European Central Bank (ECB), according to a report published by the Financial Times on Tuesday.

The newspaper quoted an anonymous person with insider knowledge who said Siemens decided to transfer the money to the ECB partly because of concerns about the French bank's future financial health and partly to benefit from the higher interest rates at the ECB.

The report said it was not immediately clear which French bank was concerned, but excluded BNP Paribas.

Last week, Moody's credit ratings agency downgraded France's two other big banks, Societe Generale and Credit Agricole, over their exposure to Greece's debt crisis.

Siemens' decision was a sign, the newspaper said, of how companies are seeking safe havens for their deposits as the eurozone debt crisis drags on.

All in all, Siemens is reported to have placed between 4 and 6 billion euros at the ECB, mostly through one-week deposits.

Siemens declined to comment on the report when contacted by Deutsche Welle.

Crisis spreading?

Of all European banks, French lenders have some of the highest exposures to Greek sovereign debt.

BNP Paribas and Credit Agricole also have large holdings of Italian sovereign debt, which Standard & Poor's ratings agency downgraded by one level from A+ to A on Monday night. This decision adds to worries that the debt crisis is spreading from Greece's relatively small economy to its bigger neighbors.

European banks have also received bad news from China: According to news agency Reuters, the Bank of China has stopped foreign exchange forwards and swaps trading with several European banks.

In its online edition, German weekly 'Der Spiegel' quoted two sources with knowledge of the affair as saying China's decision was affecting French banks Societe Generale, Credit Agricole and BNP Paribas, among others.

Siemens is only one of a few large companies with a license that allows them to bank money directly with the ECB. The company is known for taking precautions: Only last year, Siemens surprised the industry by founding its own bank to counter concerns about the ongoing financial crisis.

Report: Nina Haase (Reuters, AFP)
Editor: Sam Edmonds