2023-06-25 07:15:42
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The Livret A is not only a savings medium for individuals, but also a financial windfall for banks and the State. So, what is the money deposited on this investment really used for?
The
A booklet
is an essential investment, held by approximately 8 out of 10 French people. With the other regulated savings accounts, in particular the LDDS and the LEP, the amounts accumulated at the end of 2022 reached the very fine sum of 558 billion euros . But do you know what this money is used for? If the financing of social housing is certainly the best known component of the Livret A, there are in fact many other uses made by the State and by the banks of this jackpot.
Social housing, historic mission of the Savings Fund
Part of the money deposited in Livret A savings accounts by individuals is channeled into a savings fund managed by the Caisse des dépôts et consignations, or CDC. In 2022, this corresponded to a resource of 325 billion euros to enable the financing of projects of general interest through very long-term loans, i.e. 59.5% of total outstandings, all categories of combined passbook savings accounts, increased by €41.3 billion in own funds for the Savings Fund.
Since 1984, part of the Livret A money has been used to finance the construction of social housing. In 2022, 84,000 new homes offered at moderate rents have been built, for an overall budget of 11.6 billion euros. In total, 174.3 billion euros out of the 558 billion are dedicated to social housing, which represents 31.25% of the total outstanding amount of regulated savings accounts.
Read also: Savings: the Livret A voted the most interesting investment, ahead of life insurance and real estate
Other uses of Livret A money by the CDC
To a lesser extent, the Savings Fund also grants loans for the implementation of local projects of general interest. This may, for example, be the case for improving the energy performance of a school, the introduction of new modes of transport, etc. The year 2022 was marked by the launch of two new offers: the Green recovery loan, allowing in particular the financing of projects related to biodiversity or renewable energies, and the Tourism recovery loan.
Beyond its mission of financing projects of general interest, the Savings Fund directs part of the sum at its disposal towards financial assets, in other words: shares, bonds, etc. The goal? Ensure the liquidity of the money, in particular to allow savers to continue to make withdrawals at any time from their Livret A. The Savings Fund thus holds nearly 3% of France’s debt. Taking all categories of investment vehicles together, the financial assets of the Savings Fund represent 46.5% of its total outstandings.
225 billion euros kept by banks
It is precisely 40.5% of the sums collected on Livret A and LDDS accounts that remain at the disposal of the banks, and 50% for the LEP. In total, this represents the handsome sum of 225 billion euros. But the banks are not free to use it as they wish. In reality, only 5% of this sum can be used as they see fit by the banks, ie approximately 11 billion euros.
However, the use of the remaining 95% is strictly supervised. The vast majority of banks must use the Livret A money they keep to grant loans to small and medium-sized enterprises (80% of outstandings). They are also required to finance ecological projects, up to 10% of the total sum, and the social and solidarity economy, for the remaining 5%.
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