Compensation planned in French bank takeover

France formally announced the nationalization of most of its banks and five industrial giants yesterday. The government decided to pay substantial compensation to the firms and to exclude foreign banks from the takeover.

The fate of the foreign banks and the amount of compensation had been the two main uncertainties in the new Socialist government's long-awaited nationalization plan.

The Cabinet of President Mitterrand brushed aside a recommendation from the Council of State -- which advises the government on constitutional matters -- to include foreign banks in the takeover for the sake of fairness.

The government said that compensation would be based on the value of the companies' shares on the Bourse.