The role of the Banque de France, an institution whose capital is owned by the State, goes far beyond that of a simple central bank. Although its integration into the European System of Central Banks (ESCB) in 1998 redefined the scope of its activities, it retains many public-interest missions that are specific to the French context.
Services rendered to the Treasury
Management of the Treasury Account
Since 1857, the Banque de France has held the Treasury's single account. This account serves as the hub for the circulation and centralisation of State funds. It provides a link between the thousands of public accountants throughout France, all of whom have access to this common treasury.
An agreement signed on 26 April 2002 modernised this management by introducing real-time balance monitoring. In accordance with article L.141-6 of the French Monetary and Financial Code, these services are remunerated to cover the costs incurred by the Bank.
In practice, the Treasury now invests its surpluses on a short-term basis and borrows to cover its temporary needs. This system has significantly reduced the amount outstanding on the account at the end of the day.
Organisation of debt auctions
The Bank manages the TELSAT system, which collects bids at auctions of Treasury bills and OATs. This system transmits the results to the Treasury within one minute of the bidding deadline.
It also holds current accounts for Treasury bills held by banks and insurers as part of the SATURNE system. Bonds have been held by Euroclear France since SICOVAM SA merged with Euroclear Bank in 2001.
Balance of payments
Under Article L.141-7 of the Monetary and Financial Code, the Banque de France is responsible for drawing up France's balance of payments and international investment position. This task is carried out on the instructions of the Minister of the Economy and Finance.
The methodology follows the principles defined by the International Monetary Fund and Eurostat to enable international comparisons.
Contribution to banking and financial regulation
Participation in supervisory authorities
Although banking and financial regulation is not directly exercised by the Banque de France, it plays a decisive role through the presence of its Governor on several key bodies.
The Financial Security Act of 1 August 2003 reconfigured the institutional landscape. The Governor chairs the Credit Institutions and Investment Firms Committee (art. L.612-1 of the CMF) and the Banking Commission (art. L.613-1 of the CMF).
A representative of the Bank sits on the Autorité des marchés financiers (AMF), which was formed from the merger of the Commission des opérations de bourse and the Conseil des marchés financiers.
Role in the stability of the financial system
The Act of 26 July 2013 explicitly entrusted the Banque de France, together with the High Council for Financial Stability, with the task of ensuring the stability of the financial system (art. L.141-5-1 of the CMF).
This role was strengthened after the 2008 financial crisis, which demonstrated the importance of macroprudential supervision. The Bank analyses systemic risks, i.e. those likely to cause a domino effect in the financial system.
Recent developments
The Banking and Financial Regulation Act of 22 October 2010 broadened the powers of the Banque de France. It can now share information on payment and settlement systems with other authorities, even if this information is covered by professional secrecy.
This law also authorises it to enter into cooperation agreements with its foreign counterparts to exchange information on these critical infrastructures.
Economic and financial database
Company bank register (FIBEN)
FIBEN, created in 1982, contains information on around 3 million companies and 2 million managers. This file is accessible to credit institutions via a secure telematic system.
The law of 4 August 2008 on the modernisation of the economy limited the period for which data can be retained. Decree no. 2009-198 of 18 February 2009 set this period at a maximum of four years for major incidents such as a compulsory liquidation.
A ruling by the Cour de Cassation on 21 October 1997 described the maintenance of this database as a public service mission involving the exercise of public authority, and therefore subject to the jurisdiction of the administrative courts in the event of a dispute.
Payment incident files
The Bank manages several incident centralisation files:
- The Central Register of Unpaid Cheques (since 1955)
- The irregular cheque file (1992)
- The National Register of Consumer Credit Repayment Incidents (created by the Neiertz Act of 31 December 1989)
These files contribute to the security of means of payment and credit. Their consultation is regulated and limited to reporting institutions and the judicial authorities.
A decision by the CNIL on 28 June 2006 penalised a bank for improperly registering customers in these files, demonstrating the strict framework for their use.
Central Balance Sheet Office
Created in 1968, the Central Balance Sheet Office voluntarily collects accounting data from companies. In return, they receive a comparative analysis of their situation in relation to their sector.
Once aggregated, this information enables companies to position themselves in relation to their competitors. It also feeds into the European Commission's BACH (Bank of Accounts of Companies Harmonised) database, which compiles data from 11 European countries, Japan and the United States.
Missions serving individuals and businesses
Dealing with over-indebtedness
The Banque de France provides the secretariat for the over-indebtedness commissions set up by the Neiertz Act of 31 December 1989. These commissions, which exist in every département, draw up plans for settling the debts of individuals in difficulty.
This mission mobilises significant human resources within the Bank. It meets a growing social need, with more than 200,000 cases handled each year.
Account management services
Unlike other central banks, the Banque de France has long maintained account-keeping services for private individuals. This activity, a legacy of history, is tending to disappear.
In 2002, the Bank still managed 70,000 cash accounts and 40,000 securities accounts. Article L.141-6 of the French Monetary and Financial Code requires that these services be invoiced at their actual cost.
A 2003 Senate report (the Arthuis report) highlighted the loss-making nature of this activity, recommending that it be phased out.
Economic information
The Bank's branches contribute to the knowledge of the local economic fabric. They maintain close relationships with local businesses, local authorities and banks.
This proximity makes it possible to enrich the economic studies published by the Bank. The distribution of this information is governed by article L.144-5 of the French Monetary and Financial Code.
The Bank also produces economic and monetary statistics, some of which are forwarded to the ECB for use in conducting the common monetary policy.
Sources
- Monetary and Financial Code, in particular articles L.141-1 et seq.
- State-Banque de France agreement of 26 April 2002 on the management of the Treasury account.
- Act 93-980 of 4 August 1993 on the status of the Banque de France.
- Law no. 2001-1062 of 15 November 2001 on everyday security (article 39).
- Financial Security Act no. 2003-706 of 1 August 2003.
- French Banking and Financial Regulation Act no. 2010-1249 of 22 October 2010.
- Law no. 2013-672 of 26 July 2013 on the separation and regulation of banking activities.
- Decree no. 2009-198 of 18 February 2009 on the period during which FIBEN information may be communicated.
- Cass. 1re civ., 21 October 1997, n°95-20.872, Bulletin civil I, n°289.
- CNIL decision no. 2006-174 of 28 June 2006.
- Information report by Jean Arthuis (Senate no. 254, 2002-2003 session).
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