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France Unveils New Banking Law

by Ulrika Lomas, Tax-News.com, Brussels

26 December 2012


French Finance Minister Pierre Moscovici has recently presented to the council of ministers the bill providing for the separation and regulation of banking activities.

According to the French finance ministry, the bill is designed to protect savers’ deposits while at the same time orientating finance towards the real economy. The ministry highlights the fact that analysis of the causes of the financial crisis and the role played by the banks has led the government to legislate to separate the purely speculative activities of banks from those intended to finance the real economy.

Finance Minister Moscovici underlined the fact that the reform was conceived in order to “profoundly change the sector,” to ensure that France becomes a reference in Europe, and to re-shape the financial landscape for the next twenty years, away from speculation and towards the financing of the real economy.

Moscovici stressed that the bill places France at the head of Europe in terms of regulating banking activities, noting that although progress has already been made at Community level, different texts forming the basis of a banking union still need to be finalized. This bill is designed to encourage France’s European partners to accelerate discussions at European level and to join France in its efforts, Moscovici made clear.

The French minister explained that the bill provides for the separation of banking activities useful for investment and employment from speculative activities that banks carry out for their own account, to better trace the risks, and to be able to react more quickly. The law will improve and strengthen the capacity of public authorities to intervene during a banking crisis, it will prevent and limit systemic risks, and it will protect the banking consumer, the minister said.

Underscoring the need to protect consumers, in particular those most vulnerable, Moscovici ended by noting that the bill provides for a series of measures aimed at capping certain costs for the most vulnerable in society, at improving access to banking services, and guaranteeing a more effective procedure for debt.

French President Francois Hollande said at the time of his election that the world of finance was his "enemy," and has doubled the financial transactions tax imposed on many types of securities trading since August, although he has so far not singled out bankers for particularly adverse tax treatment.

TAGS: Finance | tax | investment | speculation | law | banking | France | regulation | services

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