Shares in Banque Nationale de Paris, Societe Generale, and Paribas all rose Tuesday on the expectation that the French central bank will letallow BNP to retain its 31.5% stake in Societe Generale, paving the way to create a $1.1 trillion asset bank.

French regulators have so far failed to indicate when they plan to take a decision, but are reported in press accounts to favor a merger of the three banks.

Societe Generale last February launched a friendly $17 billion bid for Paribas. In March, BNP launched a $38 billion hostile bid for both Societe Generale and Paribas, gaining 65% control over Paribas but slightly less than the 33% stake in Societe Generale it needs to make the three-way deal.

Societe Generale chairman Daniel Bouton has consistently ruled out any compromise with BNP, prompting speculation that the government will force Societe Generale into an alliance with BNP. -- James R. Kraus

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