ECB's Lagarde dodges question about French market turmoil

DUBROVNIK, Croatia (Reuters) - European Central Bank President Christine Lagarde largely dodged a question about turmoil in French financial markets on Friday, merely saying the ECB would deliver on its inflation target.

French markets endured another brutal sell-off on Friday as investors cut their positions ahead of a snap election that might give a majority to the far right.

Lagarde was asked if the ECB would consider using an emergency bond-buying scheme to support France, after the risk premium on French bonds jumped by the most since 2011.

"I'm not going to comment on domestic political situations," she told reporters on the sidelines of a conference in Dubrovnik, Croatia.

"I will simply say that it is the duty of the European Central Bank to deliver on its mandate and to keep inflation under control and back to target."

The Transmission Protection Instrument, devised in 2022 to stem a sharp fall in Italian government bond prices, allows the ECB to buy unlimited amounts of bonds if a country finds itself under market pressure despite running a sound economic policy.

French Finance Minister Bruno Le Maire warned that the euro zone's second-biggest economy was at risk of a financial crisis if the far right won the parliamentary election in the coming weeks.

Marine Le Pen's eurosceptic National Rally (RN) is leading in opinion polls following President Emmanuel Macron's surprise decision on Sunday to call a snap election.

Le Pen's party is calling for a cut in the state pension age, reductions in energy prices, increased public spending and a protectionist "France first" economic policy.

France's banks have also been hit hard. The biggest three - BNP Paribas, Credit Agricole and Societe Generale - have lost between 12% and 16% in value this week, the most since the banking crisis of March 2023.

(Reporting By Francesco Canepa; Editing by Alison Williams and Shinjini Ganguli)