JEAN-LAURENT BONNAFÉ SHEDS THE JACKET OF HIS dark-gray suit as he enters the second-floor meeting room of BNP Paribas’s offices at l’Hôtel de Mondragon, a grand former town hall where Napoléon Bonaparte married Joséphine de Beauharnais in 1796. Dressed in a light-blue shirt with a button-down collar and a dark-blue tie, the chief executive officer speaks so softly during a recent interview that it is difficult to hear him above the noise of the Paris traffic outside. Yet his language is clear enough. In fluent English, he spells out his basic approach to managing the euro zone’s second-largest bank by assets. “As a senior banker, you have to be able to balance the often contrasting themes of risk and innovation, as well as balance a number of different dimensions such as client relationships, technology and staff,” he says. Of BNP, he adds, “we are a balanced company, and that makes it easier for us to survive and prosper across the cycles.” The big French bank has indeed survived the financial crisis better than most European banks, but its balance poses a serious challenge for Bonnafé. The bulk of the bank’s retail operations, which generate just over half the group’s earnings, are in the heart of the euro zone and are struggling with the economic torpor caused by the bloc’s debt crisis. The French economy has been stagnant with virtually no growth for the past three quarters, while Italy and Belgium, the bank’s other big euro zone markets, have fallen....

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