France Adopts Banking And Financial Regulation Bill

by Ulrika Lomas, Tax-News.com, Brussels

14 October 2010

The French parliament has definitively adopted the government’s banking and financial regulation bill, designed to draw lessons from the global economic crisis by tightening the regulation and supervision of the banks and financial markets in France. The bill also aims to support the financing of the country’s economy.

Requested and championed by both the French President Nicolas Sarkozy and by Prime Minister François Fillon, the bill aims to implement at national level the decisions taken at the G20 summit meeting in Pittsburgh in September last year, together with several other recent European directives.

Determined to tighten regulation of both the financial sector and the markets, the bill provides for the creation of a financial regulation and systemic risk council (un Conseil de la régulation financière et du risque systémique), composed of representatives from the central bank of France (la Banque de France) and of financial sector supervisors. This newly created body is designed to better prevent risks and to better coordinate action both internationally and at European level.

In a bid to strengthen financial stability, the bill also grants the country’s Financial Market Authority (l’Autorité des marchés financiers – AMF) the authority to regulate rating agencies in France. The bill also strengthens supervision and control of cross-border banking groups by establishing colleges of supervisors.

Finally, the bill seeks to support and improve the financing of the country’s economy to accelerate recovery, by improving financing channels to benefit companies, notably small- and medium-sized enterprises, and to benefit individual households.

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