UPDATE 1-ECB's Noyer-Low household debt shields France economy

MONTPELLIER, France, Oct 29 (Reuters) - France's relatively low household debt is helping to protect the economy from the global financial crisis, ECB governing council member Christian Noyer said on Wednesday.

"The rate of indebtedness of households is relatively low in France compared with other countries. It is an element of support against the risks of the financial crisis," he told Reuters.

"It is clear that it is an element of support for activity and consumption to have a rate of indebtedness of households which is relatively moderate compared with a number of other countries," he said.

Noyer declined to comment on monetary policy following the close of an event focused on the situation of household debt in the euro zone's second-biggest economy.

In an earlier speech, Noyer said that "passive" overindebtedness, where people find themselves struggling to pay debt due to a personal event, was more common in France than cases where a household had borrowed too much money.

"On a national level...the overindebtedness of households is a relatively marginal phenomenon if you compare the number of cases with the number and size of loans that are given out each year," said Noyer, who is also the Bank of France governor.

France's real economy is being hit from the fallout of the financial crisis as companies shed jobs and confidence sours.

Only 57 percent of French people own their own home, around 10 points below the euro zone average and banks have generally required large deposits for home purchases, limiting the build up of large loans.

OECD data shows the debt of French households was only 89.1 percent of income in 2006. In Britain and the United States that ratio stands at 168.5 percent and 139.7 percent respectively.

Defaults on expensive sub-prime mortages in the United States helped to trigger the international financial crisis.

Noyer said the Bank of France wanted cases of overindebtedness to be treated more efficiently through the justice system and for this treatment to be harmonised around the country.

(Editing by Tamora Vidaillet and Chizu Nomiyama) .com; +33 1 49495339; Reuters Messaging: anna.willard@reuters.com Keywords: ECB NOYER/

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