Borrowers: The privatized French treasurer
French treasurers have a reputation for being more adventurous in derivatives than their counterparts elsewhere in Europe. If that was so in the early 1990s it is less so today. The corporate derivatives scandals of 1994 and 1995 also had their impact in France. There is much more scrutiny and board-level control. But French treasurers believe their chief financial officers are more financially literate than elsewhere in Europe. So second and third generation derivatives are actively used by French treasurers, who believe they can understand and explain the risks they are running. But the days when Thomson-Batif, Rhône-Poulenc and Aérospatiale were major derivatives players are over. "The leveraged transactions are less and less frequent," says a Paris-based corporate banker. Some of the players - Pechiney, Rhône-Poulenc, Elf, Renault, and tobacco company Seita - have been privatized, putting "more focus on the quality and predictability of earnings", the banker says. Observes a treasurer at a privatized French company: "I've never seen in France a company being very active in exotic products when that company was in private hands.