In the years leading up to Covid-19, French corporate debt boomed. This was in marked contrast to its steady decline, as a proportion of the economy, everywhere else in Europe. Much of this was because of the unusually high and rising propensity of French firms to take on leverage to make acquisitions, especially abroad.
Regulators, including the Banque de France, tried in vain to slow the build-up using prudential tools. French corporate debt surpassed 80% of GDP at the end of 2019, including more than €1 trillion in loans from French banks.
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