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 Monday, 6 January, 2003, 17:59 GMT
French bank chief stands trial
Jean-Claude Trichet
Mr Trichet is one of nine defendants
Bank of France Governor Jean-Claude Trichet has gone on trial over his alleged role in one of the largest banking scandals in the country's history.

Mr Trichet is accused of helping to conceal the full extent of losses run up by the then-state owned bank, Credit Lyonnais, nearly a decade ago, when he was treasury director at the French finance ministry.

Eight other executives and officials are standing trial with Mr Trichet, who denies all charges against him.

A conviction could jeopardise a plan for Mr Trichet to replace Wim Duisenberg as president of the European Central Bank (ECB), the BBC's Europe business correspondent Patrick Bartlett says.

Accounting claims

On the first day of proceedings, the presiding judge rejected a request for the trial to be delayed to allow prosecutors more time to examine new evidence.

Any delay could mean Mr Trichet might run out of time to clear the cloud of allegations before his ECB appointment is due to begin.

In a deal struck in 1998 by French President Jacques Chirac, Mr Trichet is due to take on the ECB leadership in July.

The bank sets interest rates for the 12 countries which have adopted the euro.

Wim Duisenberg
Mr Duisenberg was something of a compromise candidate
The Credit Lyonnais charges date back to the early 1990s when, as a state-owned enterprise, it was carrying huge losses related largely to investments in property.

A series of rescue packages was devised to save the bank, before it was privatised in 1999.

But investigating magistrate Philippe Courroye alleges that in 1992 and early 1993 Credit Lyonnais' accounts deliberately understated provisions set aside to cover risky investments.

This ensured the bank did not fall foul of European laws stipulating minimum levels of reserves.

Mr Trichet, who headed the French treasury at the time, signed off the accounts.

He is accused of releasing false and misleading information and complicity in publishing inexact accounts.

Mr Trichet's lawyers say their client could not have known the results announced by the bank were fraudulent.

Promotion worries

The trial is due to last about six weeks.

The ECB headquarters in Frankfurt
The ECB sets interest rates across the euro area

Mr Trichet's co-accused include the bank's former chairman, Jean-Yves Haberer, and former Bank of France Governor Jacques de Larosiere.

In 1998, Mr Trichet only failed to clinch the ECB leadership outright when the German Government refused to have a French banker at Europe's economic helm, and insisted on the Dutch Mr Duisenberg, who was seen as more neutral.

  The BBC's Jon Sopel in Paris
"This has become something of a trial of the French justice system"
  Marc Roche, Le Monde
"He [Mr Trichet] is the best choice to guide Europe and the euro in the next four years"
See also:

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