Les activités bancaires sous contrôle

We are beginning to know the contours of the banking reform promised by François Hollande during the presidential campaign. Even if nothing has been decided, it seems that the future of the universal bank is preserved.

France will thus be the first nation in the European Union to reform the banking sector with the aim of separating risky businesses from those that finance the economy and prevent future crises .

The role of banks in the unfolding of the crisis

Even if they are not directly at the origin of the evils which affect the world economies, it should be recognized that by playing the sorcerer’s apprentices, the banks allowed the crisis of the American subprimes of 2008 to “export”. Today, there is not a single state that is not affected by toxic borrowing. Worse still, many local authorities and administrations are affected by variable loans indexed to risky financial instruments such as foreign currencies.

Compartmentalize banking activities

Separating risky banking activitiesPierre Moscovici, Minister of Economy and Finance announced the main lines of the reform during a meeting at the AMF, recalling that it was a campaign promise from François Hollande and not hesitating talking about an in-depth overhaul of the financial landscape for the next twenty years . However, the concept of the universal bank is preserved .

The speculative activities targeted by the reform will have to be managed independently of those that serve the economy. Operations such as trading for “own account” will be subject to strict supervision. The minister also mentioned the possibility of prohibiting banks from certain activities such as speculation on agricultural raw materials .

The banks, through the FFB, have taken note of the government’s decision but have made few comments for the moment. After having been forced by the “ Basel III ” agreements to reconstitute their capital, here they are again in the hot seat, forced to undertake a major structural reform.

Prevent future crises

The purpose of the reform is to prevent future financial crises and to prevent the State from being called upon again in the event of a bank failure, as has been the case in recent years.

The new entities responsible for managing risky financial activities will also be subject to increased monitoring. A new control authority will be created and each bank will have to ensure that a mechanism is in place to facilitate its task in the event of intervention.

The banking reform also provides for an increase in the financial participation of banks in the Guarantee Fund . The latter, created by the Financial Security Law of June 25, 1999, allows customers of a failing bank to be compensated. For deposits, the ceiling has been set at €100,000 per customer and per bank.

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