The Banque de France has a unique institutional architecture. Its recent evolution reflects its integration into the European System of Central Banks (ESCB) and the adaptation of its governance to European requirements.
Management bodies
Developments at the Monetary Policy Council
The Conseil de la politique monétaire (CPM), created by the Act of 4 August 1993, has undergone a major transformation. Initially designed to define French monetary policy, its role was reduced following the introduction of the euro.
Act no. 2007-212 of 20 February 2007 transformed it into a simple formation of the General Council, renamed the "General Council Monetary Committee". This structure was finally abolished by the LME Act of 4 August 2008, as it had become obsolete following the transfer of monetary prerogatives to the European Central Bank.
Under article L.142-3 of the French Monetary and Financial Code (prior to 2008), the Board comprised the Governor, two Deputy Governors and six members appointed for nine-year terms. Their term of office was irrevocable except in the event of incapacity or serious misconduct.
The General Council: composition and powers
The General Council is the central governance body of the Banque de France. Its composition is defined in article L.142-6 of the Monetary and Financial Code.
It includes:
- The Governor (Chairman)
- Two Deputy Governors
- Two members appointed by the Council of Ministers
- A representative of the Bank's employees
A censor, usually the Director of the Treasury, attends meetings with the right to object. This mechanism illustrates the residual control of the State over certain of the Bank's non-CBC activities.
The Board takes its decisions by majority vote, with a minimum of six members present. In the event of a tie, the Governor has the casting vote.
Its remit covers:
- Management of activities outside the ESCB
- Staff regulations
- Managing shareholders' equity
- Budget and accounts
- Allocation of profits
The role of the Governor and Deputy Governors
The Governor has extensive powers. Appointed for six years, renewable once, by decree of the Council of Ministers (L.142-8 CMF), he:
- Chairs both boards
- Represents the Bank in dealings with third parties
- Signs agreements alone
- Appoints to all positions
- May be delegated by the Boards
It draws up an annual report addressed to the President of the Republic and to Parliament.
Deputy Governors, appointed under the same conditions, perform only those functions delegated by the Governor.
Independence and its guarantees
The status of managers
Independence is a fundamental requirement of European law. Article 108 of the EC Treaty (now Article 130 TFEU) and Article 7 of the ESCB Statute formally require it.
Article L.141-1 of the French Monetary and Financial Code sets out this obligation in domestic law: "In the performance of its tasks in connection with its participation in the European System of Central Banks, the Banque de France, in the person of its Governor, Deputy Governors or any other member of the Monetary Policy Council, may neither seek nor take instructions from the Government or from any other person.
This independence is reinforced by a six-year term of office for the Governor, which exceeds the length of a legislature.
Incompatibilities and obligations
To ensure that there are no conflicts of interest, members of the governing bodies are subject to a strict regime of incompatibilities during and after their term of office.
Article L.142-8 of the CMF prohibits governors and deputy governors:
- Any public or private professional activity
- Elected offices
- Interests in companies subject to the Bank's supervision
Exceptions exist for teaching and international functions, with the agreement of the Board.
Directors are also bound by professional secrecy (art. L.142-9 CMF).
Jurisdictional guarantees
Independence enjoys exceptional jurisdictional protection. The Governor may only be removed from office in the event of incapacity or serious misconduct, as provided for in Article L.142-5 of the CMF.
The system provides two levels of protection:
- At national level: appeal to the Council of State
- At European level: appeal to the European Court of Justice (art. 14.2 of the ESCB Statute)
This European guarantee is unique and demonstrates the importance attached to the independence of national central banks.
Territorial organisation
The branch network
The Banque de France maintains a dense territorial network. Under article L.142-10 of the Monetary and Financial Code, all its "comptoirs" have been branches since 1993, the former distinction between branches and offices having disappeared.
These local offices play an essential role in..:
- Maintenance of banknotes and coins
- Execution of non-cash payments
- Knowledge of the local economic fabric
- Monitoring over-indebtedness cases
Until 2003, there were more than 200 regional offices.
Reorganisation of the network
A major restructuring was undertaken in the early 2000s. The Arthuis report to the Senate (No. 254, 2002-2003 session) highlighted the cost of this dense network and proposed halving the number of branches.
This reorganisation met with local political resistance, as the branches play a role in regional development and public service.
The Court of Auditors, in its investigation carried out at the request of the Senate Finance Committee (art. 58-2° of the LOLF), confirmed the loss-making nature of several local activities.
Local services
The branches carry out a variety of tasks:
- Managing means of payment
- Dealing with over-indebtedness (Neiertz Act of 31 December 1989)
- Keeping records of payment incidents
- Gathering economic information
They host local advisory committees made up of economic players who advise the Bank on local economic conditions.
Banque de France staff
Special legal status
The Bank's staff have a hybrid status. Although the Banque de France is a public body sui generis (Tribunal des conflits, 16 June 1997, Société La Fontaine de Mars), its staff are not civil servants.
Staff regulations are discussed by the General Council and then submitted to the Ministers for the Economy and the Budget for approval.
Application of employment law
The Conseil d'Etat clarified this regime in its ruling of 22 March 2000 (Syndicat national autonome du personnel de la Banque de France): staff remain subject to the Labour Code despite their participation in a public administrative service.
This position was confirmed by the ruling of 30 July 2003 (Banque de France). The Labour Code applies unless incompatible with the status of the Bank or the performance of certain tasks.
Staff are subject to an exclusivity obligation: article L.142-9 of the CMF prohibits any shareholding or remuneration in a company, unless an exemption is granted by the Governor.
Disputes and jurisdiction
Litigation is the responsibility of the administrative courts. Article L.144-3 of the CMF assigns disputes between the Bank and its employees to the administrative courts.
This jurisdiction is broadly interpreted in case law. It covers:
- Disputes relating to remuneration (CE, sect., 13 June 1964, Gauvin)
- Claims for compensation for working conditions (CE, 3 July 1903, Mercié)
- Litigation concerning professional elections (CE, sect., 6 May 1970)
This administrative jurisdiction even extends to elements of the status that come under labour law, creating a litigation system that is unique in the French institutional landscape.
Sources
- Monetary and Financial Code, articles L.141-1 to L.144-5
- Act 93-980 of 4 August 1993 on the status of the Banque de France
- Act no. 2007-212 of 20 February 2007 containing various provisions concerning the Banque de France
- Law no. 2008-776 of 4 August 2008 on the modernisation of the economy (LME)
- Conseil d'État, 22 March 2000, Syndicat national autonome du personnel de la Banque de France
- Tribunal des conflits, 16 June 1997, Société La Fontaine de Mars v Banque de France
- Arthuis Report to the Senate n° 254, 2002-2003 session
- Treaty on the Functioning of the European Union, Article 130 (formerly Article 108 TEC)
- Statute of the ESCB, Articles 7 and 14.2
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