In d'Azur a client empty its accounts and booksIt recognizes the feelings but they are usedThe fall of the European currency continuesTo be wanting that can prevent says conventional wisdomToday this secular commitment is less obviousThe bulk of the depreciations is now passedToday 360 employees working on its sitesIt must faithfully transpose them into national lawThe burst of the compensation fund of VAT 5As the Government is not resorting to the 49"It is a well constructed plan, which will allow the market road rehabilitation," commented yesterday on the leader of a French Bank. Banks support plan presented yesterday by Christine Lagarde, which extends to the end of 2009, indeed meets the two difficulties currently encountered by the French banks: liquidity and solvency. The plan is structured at the time on two floors, with the creation of two specific structures.
"In the titles of good quality".
The first level must improve the access of banks to liquidity. They suffer from difficulties to access the money market for maturities exceeding three months. The plan must ensure refinancing of banks in the medium term, i.e. for loans ranging from one to five years. A company will be created, which will throw financing on the market with the guarantee of the State. These loans will be collatéralisés "by good quality titles", changes to the structure, as mortgage or consumer. Unlike the business credits, these titles are now not accepted as a guarantee by the Central Bank European. The quality of the assets will be controlled by the France Bank, but the structure will be under the authority of the Treasury.
This "place" structure is not necessarily fully publicly owned. It will accommodate turn table, but how minority banks. "The idea is to empower them in the system", comments close to Christine Lagarde. Thus, a bank whose own funds are not considered sufficient may not qualify for refinancing. A ceiling of EUR 320 billion, which includes the 55 billion euros of guarantee for the refinancing of Dexia, has been set. The State will be obviously paid in return for its guarantee.
Place this evening meeting
The second floor of the plan aims to strengthen the own funds of banks, weakened by write-downs of assets related to the crisis. "The British plan gives 9 solvency ratios banks." "Be that French banks can achieve this ratio", said Christine Lagarde yesterday. Clear: avoid that French banks suffer from a distortion of competition.
A second specific structure, the society of equity of State (EPPS), that already exists, will be able to inject equity. It will purchase subordinated securities or preferred shares by banks. The mechanism must avoid too much dilution of existing shareholders. The structure will also be able to enter the capital of a bank in case of difficulties, in this case, buying shares. The EPPS may intervene up to EUR 40 billion, but the amounts could be reviewed if need be made feel. Insurers will also benefit from this "second window".
The last point of the plan concerning accounting standards. A discussion was initiated with the Germany, in parallel with the ongoing reform led to the level of the European Commission. A place will take place this evening meeting between the authority of financial markets, the Banking Commission, the insurance supervisory authority and mutual companies, and the national company of the Board of Auditors. The four agencies will focus on the accounting treatment of certain financial instruments whose market value has become impossible and prepare recommendations which will have a retroactive effect on the accounts of the third quarter.