French Regulator Says Bond-Yield Surge Won’t Threaten Bank Stability

France’s banking regulator said Tuesday that a sharp rise in government bond yields would not threaten financial stability because banks’ domestic public-debt exposure remains limited and diversified.

The Prudential Supervision and Resolution Authority (ACPR) said recent trends in French government bond spreads had not changed that assessment.

The view comes as investors focus again on France’s debt pressures and the government’s efforts to reduce its budget deficit.

Student protests over education spending have entered their third week, adding to the political backdrop surrounding France’s public finances.