The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

French debt binge turns spotlight on buy-outs

Cap on French banks’ corporate exposures could be transferred across Europe; household leverage outpacing corporate.

Rampant bank and capital markets borrowing in France is alerting financial policymakers to the danger of French corporations taking on ever more debt to make acquisitions. 

French M&A volumes reached their highest level since the 2008 financial crisis in 2017, with outbound volumes accounting for around two thirds of deals, according to Dealogic.

Out of about 20 key global markets, France was second only to Hong Kong in terms of the increase in private non-financial debt over the last two years, according to a January report from the Institute of International Finance.

France’s financial stability board, the HCSF, acknowledged this could be a problem in December when it proposed to cap systemic French banks’ exposures to the most indebted big resident firms, initially at 5% of their capital base. The French authorities are now in a consultation period until the spring to hammer out the details with the ECB, European Commission and European Banking Authority. 

European transfer

The rule could then be transferred across Europe, at least on a voluntary basis.

“Banks cannot have too high a concentration of their risk in these overly indebted corporations,” Banque de France governor François Villeroy de Galhau told French television channel BFM Business late last year.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree