http://dealbook.nytimes.com/2011/11/03/bnp-paribas-writes-down-greek-debt-as-earnings-slump/
Without mentioning names, it has been understood for a while that if the Greek government fails and defaults on its sovereign debt, French banks stand to lose a lot – enough to force them to seek government bailouts.
BNP Pariabas is the largest bank in France. It announced it has given up any hope for a recovery in the value of their Greek debt and taken a $2.9 billion (60%) writedown on its Greek debt, and trying to unload its Italian and Spanish debt and loans to Greek businesses.
The more interesting part is near the end of the story, as is often the case. “Tier 1” capital is the “Rock Solid” money held by banks that is the cushion to prevent the banks from being knocked over in a panic. BNP Paribase exceeds the 9% target of Tier 1 capital, but in order to reduce risk, it is exiting the business of making loans in U.S. Dollars – just too risky.