Bank boss a hostage to misfortune

It is not so much a revolution as a white-collar counter-revolution in defence of an ancien regime.

Hundreds of bank employees, in suits and silk scarves, have taken their boss hostage in his own office. They have draped placards insulting the Juppe government in the potted palms of their bank's lobby. And they have turned the marbled halls of one of the most prestigious sites in the financial district of Paris into an impromptu disco. Yesterday they were settling in for a prolonged siege.

Except there is no siege. The protesters seized the governor of the bank and 10 members of his board on Friday and held them prisoner throughout the weekend. But the government has made no attempt to rescue the bank's chief, a government appointee (who seems in two minds whether he supports his captors or not). Yesterday afternoon there was one policeman outside the building, directing traffic.

The dispute provides a microcosm of France's once-cosy public-private business relationships and the impact of the sometimes clumsy attempts by the centre-right government of Alain Juppe to expose them to market forces. The government announced plans last year to dismember the Credit Foncier de France, which for more than 140 years had a government-authorised monopoly on loans for the building of homes for the less well-off.

The bank, technically a private institution but always run by government appointees, suffered vast losses in the 1980s, when permitted by the then Socialist government to go beyond its traditional role and speculate in property at large. The new centre-right government which took power in 1995 abolished the bank's monopoly on loans for cheap housing developments and then, last July, announced that its remaining business would be split between two other institutions (with the loss of 1,800 jobs).

For years, Credit Foncier employees seemed to have the best of both worlds, private- sector salaries and the security and status of civil servants.

Now the employees insist that they are the victims, not of an economic revolution, but of a political plot. They point out that a large part of the bank will be merged with another institution once headed by the present housing minister, Pierre- Andre Perissol. They compare their bank's modest profits last year with the billions still being spent to bail out the much larger, state-owned Credit Lyonnais.

Yesterday the government said it had appointed a conciliator to try to resolve the dispute. But the Finance Minister, Jean Arthuis, said there was no question of refloating Le Foncier. "We are no longer in the business of creating new, publicly owned banks," he said.

The captive governor, Jerome Meysonnier, originally appointed as an executioner, has gone native and pleaded for his bank's survival. He "understands" and "admires" the protesters but they "should not go beyond certain limits". He faced his fourth night sleeping in his dishevelled office, which he begged the media not to film.