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Until Friday, French banks were forced to maintain an additional capital buffer for certain savings accounts, deposited with the state-owned Caisse des Dépôts (CDC) fund. Since the financial crisis, these funds were not included in the overall 3% calculation.
The ECB argued that these funds should not be taken into account because in the event of a liquidity crisis the state-owned CDC fund may not be able to immediately transfer the capital required to the individual lender.
French banks argued that they should not assume the cost of this risk on behalf of the French state. The ECJ ruled that the ECB’s supervisory board, headed by Ms Danièle Nouy, misinterpreted the law.
All major French lenders have leverage ratios well above the 3% benchmark, but lenders have argued that the rule lead to an inefficient use of capital. The ruling means that the bottom line of all systemic lenders will look more robust.