French Economy Minister Christine Lagarde said today there was no need for Société Générale to merge with another bank.
Last week, SocGen said it had discovered an alleged fraud by one of its traders that led to €4.9 billion of losses at the bank.
SocGen's problems have reignited market speculation that it could be taken over by BNP Paribas, France's biggest listed bank. Other analysts have speculated that SocGen might be vulnerable to a break-up bid.
But Ms Lagard today said: "Société Générale is under no constraint to merge with another financial company."
Her statement was the latest sign that France's establishment is rallying round to SocGen's defence in an attempt to stave off talk that a foreign rival might make a takeover bid for the company as its market value sinks.
Trader Jerome Kerviel (31) is in police custody, helping an investigation into how the losses piled up. Mr Kerviel handed himself in on Saturday.
SocGen's shares tumbled today after Citigroup said the French bank's franchise was "severely impaired". The shares fell by 9 per cent in early trading.