THE shining towers at La Defence, the purpose-built business district in Paris, speak volumes about the ambitions and the assets of France's leading companies. Some of the most spectacular buildings, soaring to more than 40 storeys, bear the logos of France's biggest banks and make an unambiguous statement about their size and strength. As the imposing edifices suggest, French banks have taken globalisation to heart in recent years and are determined to secure a place at the top table among the leading universal banks.

Global ambitions come at a cost, however, as the banks are learning once again in their overexposure to Asia and Russia, and their dabblings in hedge funds. Credit Lyonnais made new provisions of $1,000 million in the first half of this year, 80 per cent of it against Asian and Russian exposure. The near collapse of Long-Term Capital Management (LTCM), which cost the chairman his job at UBS, Europe's biggest bank, has also created waves in France. When Paribas and Societe Generale contributed $100 million and $125 million respectively to the $3,600 million rescue of LTCM - despite having no previous links with the fund - their shares tumbled by more than 10 per cent, breached daily fluctuation limits and were temporarily suspended.

'Banks have moved from pure lending to a mix of lending and investment banking and capital market involvement which is a much more complicated mathematical calculation,' says the deputy general manager Africa and Middle East at Societe Generale, Bernard Houtekier. 'The crises in Asia, Russia and Latin America have put in jeopardy all the good calculations that were made.'

Societe Generale's Arab Fund, launched in October 1997, took a beating in the first half of this year, incurring losses in the second quarter which produced a dollar return of 4.99 per cent. The fund has assets of $51 million invested in Bahrain, Egypt, Jordan, Lebanon and Oman, with a third concentrated in Egypt. The one consolation in the disappointing performance is that funds invested in other emerging markets have fared even worse. 'It was down but the performance is better than average,' says Houtekier.

The Middle East remains relatively immune from the global financial turmoil because its economies are comparatively closed and there is little foreign investment in regional stock markets or property. Commodities are not immune, however, as the 30 per cent fall in oil prices attests. Paris- based bankers expect the combination of the Asian downturn and lower oil revenues to hit project financing for major projects - in the Gulf in particular.