New rules to limit rampant private-sector borrowing in France could just be the beginning if its debt binge does not calm, according to one of the country’s most senior financial policymakers.
Robert Ophèle, chair of the French financial markets’ authority, the AMF, says the French authorities “could go further” in macro-prudential tightening as French household and corporate borrowing continues to outpace eurozone peers – with corporate borrowing driven in part by leveraged acquisitions, particularly in the US.
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| Robert Ophèle, AMF |
Non-financial corporate borrowing in France, about 165% of GDP, is higher than in all eurozone countries except Belgium, according to the ECB.
French and Belgian banks had the highest rate of corporate and retail loan growth in the bloc, about 8%, compared with about half that rate at German banks, according to a Deutsche Bank report late last year, although in its communication on the issue, the High Council for Financial Stability (HCSF) drew special attention to the increase in big firms’ market borrowing, up almost 50% since 2011.
Recently agreed French acquisitions abroad include Atos’ $3.4 billion purchase of Syntel, in the US IT services sector, and Axa’s $15 billion takeover of Bermuda-based XL, in insurance.
