A state puppet?

“OUR aim”, says Mr Jean-Yves Haberer, the head of Crédit Lyonnais, one of France's two big state-owned banks, “is to create a German bank à la française.” He and his lieutenants have not wasted time. After a two-year spending spree, Crédit Lyonnais now has a European network to rival that of the mighty Deutsche Bank. It has banking assets of $270 billion and has amassed an impressive portfolio of stakes in top French companies. Could the bank have grown so big, so fast if it were privately-owned?

The question is of more than academic interest. Britain's Monopolies and Mergers Commission must report, before December 28th, to the Department of Trade and Industry (DTI) on Crédit Lyonnais's proposal to increase its 30% stake in Woodchester Investments, an Irish leasing company with British subsidiaries. The DTI may veto the deal if it decides that the bank has an unfair advantage over private-sector rivals because of its state ownership. Crédit Lyonnais's executives are quick to protest that the bank is run along purely commercial lines.