Financial System of France - International Finance

Financial System of France

The financial system of France is one of the oldest in Europe, although it was generally formed somewhat later than in Holland and England, since the banks that had arisen in the early days were faced with unusually complex circumstances and curtailed their activities. It is no coincidence that Napoleon at a meeting of the Council of State of France (April 2, 1806) said: "In France, there are no people who would know what a bank is, this kind of people only have to be created."

It is believed that the first French bank appeared in 1716, when Scotland's John Lowe the French Minister of Finance was granted monopoly rights to the activities of Banque Generale ("General Bank" ). The banker immediately started printing money and flooded the country with paper bills; this issue caused the collapse of public finances, and "General Bank" was closed. However, it is clear that without the banks the country did not remain - by the end of the century there were already about fifty banks operating in Paris, among which were the three largest and most famous banks that issued banknotes: Caisse des Compts Curant, founded in 1776, Garde Caisse ("Cash Register", 1797) and Comptoir de Commerce /Case de Jabach ( Commercial office ", or" Cash of Yabaha ", this bank was founded in 1800. Somewhat earlier, in 1798, the first issuing bank in the French province was opened -" The main trading company of Rouen "; he was entitled to issue small denomination banknotes of -100 francs.

In general, the financial and banking system of France for a long time remained undeveloped, accordingly, it did not cover the province. Although small banking institutions operated here, all their activities were limited to the purchase of bills of exchange and their re-calculation in the Bank of France (Banque de France ). A number of banking transactions were made by the main tax collectors, through them passed significant financial resources, as well as notaries, using the possibility of drafting bills of exchange .

Simultaneously, the huge colonial acquisitions of France, especially in North America, required the creation of a "parallel" a financial system for servicing colonial policies. In the first years after the Restoration (after 1815) the banks of Rouen, Nantes, and Bordeaux were established - they obtained the right to carry out the same operations as Banque de France, but within the framework of more stringent restrictions. The economic upsurge brought about a number of large banking institutions, the most successful was the Rothschild Banking House, which was particularly successful in the era of the July Monarchy (1830-1848). In the first decades of the XX century. first under the blows of the Great Depression, and then the two world wars, the financial and banking system of France practically collapsed. It was created anew after 1944. The active participation of the country in the integration activities of the EU-EU contributed to making the country's finances more dynamic and effective; now it is considered one of the best in the world (although many of its institutions are not developed enough, including stock exchanges). Let us also note the fact that the financial and banking system of France (like the German one) proved to be fairly stable during the global crisis of 2008-2010, although it also revealed its weakness.

The most significant changes in the banking system of France were related, first, to the Law of 1984; secondly, with the entry of France into the euro zone, and thirdly, occurred during and after the global crisis of 2009-2010, when new legislative acts were adopted. The 1984 law transformed the banking system of the country, introduced fundamental changes to all financial institutions, which is especially important, unified banks, giving them the same status. Banks were allowed to carry out any banking activities, with the exception of certain clearly defined areas. At the same time, a number of supervisory bodies were established, including the Commission Bancaire (Banking Commission), which operates under the supervision of Banque de France, whose duties included monitoring the implementation of established banking rules. The creation of the ECB deprived Banque de France (like other central banks of the euro area) of the functions of the issuing center.

Now in France there are more than 400 commercial banks, but the bulk of their operations are performed by three national banks ( Credit Lyonnais , BNP and Societe Generale) and their branches; banks of general profile specializing in industrial consumers ( Banque Indosuez , Babque Pa -ribas, Credit Commercial de France and Credit Industriel et Commercial ), as well as a network of branches and joint banks, especially Credit Agricole , Banques Populaires and Credit Mutuel. Banking services, despite their diversity, are highly concentrated: in recent years, five leading banking financial institutions have controlled over 60% of all deposits.

The current banking system of the country is currently experiencing great difficulties, related to the fact that they have significant assets in Greek banks and a number of non-financial organizations in Greece in crisis. In addition, the profitability in the banking sector of France is rather low and for a large number of branches there are high financial costs and an oversupply of labor.

Along with commercial banks, many other financial institutions operate in France, in the areas of specialized services - savings banks, lending institutions, specialized agencies such as Caisse de Depots et Consignations (in which deposits of savings banks are concentrated ). Credit Fonder, as well as trade banks (about 20) - all of them work in the spheres of the capital market and investments. We note that currently, in the face of great uncertainty in the eurozone, many French banks are experiencing serious difficulties - not enough capital, there is distrust of investors, low profits.

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