The Commission approved France's debt-refinancing scheme for credit institutions that aims to stabilise the financial markets.
The Commission approved France's debt-refinancing scheme for credit institutions that aims to stabilise the financial markets.
On 16 October 2008 the French authorities passed a law authorising a refinancing scheme for stabilising the financial markets and officially notified the Commission of the scheme on 28 October 2008. The French authorities decided against a direct guarantee scheme and are instead making use of a structure set up for this purpose, the société de refinancement des activités des établissements de crédit (SRAEC - refinancing company for the activities of the credit institutions), which will be the only institution enjoying a state guarantee.
SRAEC will issue securities guaranteed by the State with a view to making loans to credit institutions against collateral. The credit institutions will have to pay a premium over and above the normal market price and will have to make commitments regarding their conduct. SRAEC's activities are limited to five years. Under the law, the guarantee that the French Government can provide to SRAEC for this purpose may not exceed €265 billion.
Press release
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