Funded by cheap deposits and sheltered from foreign competition by tight government controls, the big banks of France long seemed immune to the cyclical ups and downs of the Anglo-Saxon financial world.

But these days, French bankers are confronting growing evidence that they are susceptible to the same kinds of problems dogging their U.S. and British counterparts. Both real estate loans and corporate credits have been souring, while heavy competition from mutual funds is squeezing profit margins.

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