Credit Lyonnais misses deal deadline

FRANCE has apparently missed the deadline to accept a deal with the United States to settle a long-running investigation into failed insurer Executive Life and alleged illegal asset sales to Credit Lyonnais.

It is believed that the French baulked at the deal because former Credit Lyonnais chairman Jean Peyrelevade was not covered.

The government had until early evening Los Angeles time - this morning in Paris - to accept the terms or face criminal action which could cost French taxpayers $3bn (£1.8bn) and lucrative US banking licences.

As the deadline approached, the US attorney's office in California said the ball was firmly in the French court.

France backed out of a preliminary $585m settlement in September after prosecutors added conditions, trying to target French executives including Francois Pinault and Peyrelevade.

Prosecutors say that Credit Lyonnais and other defendants illegally bought assets including a junk bond portfolio from Executive Life in 1991, short-changing policyholders. At the time, the French government owned Credit Lyonnais.

California attorney's office spokesman Thom Mrozek would not provide details on the deal but said the agreement did not involve Pinault's holding company, Artemis. He had no comment on whether Peyrelevade was part of the deal.