Undermined by the financial crisis of 2009, which was triggered by the excess risks of financial players in the United States, the image of banks in France has improved significantly. The role they have played in providing urgently, alongside the public authorities, the hundreds of billions of State Guaranteed Loans, essential for the survival of companies of all sizes and in all sectors of activity hard hit by the COVID crisis, has very clearly contributed to this improvement.
If these exceptional circumstances were able to highlight the banks in an equally exceptional role, it seems to me interesting to explain the more structural specific usefulness of the banks in France whose model, different from that present in neighboring countries, is a a powerful factor of reassurance and stability, to the benefit of all of society. This pedagogy seems all the more necessary to me since banks have the paradox that they are both very familiar to us from the daily use that we have of them but at the same time very little known from the angle of their functioning.
Let us first recall that the historic activity of banks is that of intermediation. This basically consists in collecting and remunerating savings from multiple clients, massively liquid and therefore available in the short term, to transform them into long-term loans, by professionally managing the risks of such a transformation into rates, into liquidity and over time.
Double specificity
As part of this activity, which can be found in all banks around the world, the banks operating in France incorporate two specificities into their model: on the one hand, at the level of savings, they offer regulated products that are largely indexed on inflation, such as the Livret A and the Livret d’Épargne Populaire, very advantageous in terms of remuneration for the saver.
On the other hand, at the same time they allow borrowers who have taken out a mortgage to benefit from a fixed rate, offering them very clear budgetary visibility over twenty years, independently of the inevitable fluctuations in market rates over a such duration. In a context of rising interest rates such as the one we are experiencing today, for the bank the cost of the savings collected – the liabilities – increases more rapidly than the remuneration of the loans – the assets -, the rebalancing not taking place only gradually over time.
This dual specificity has become particularly noticeable in recent weeks: while savers benefit from a 3% interest on their Livret A savings accounts from their bank, borrowers from this same bank can keep fixed rates at less than 2% on their mortgage taken out in recent years.
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Vigilance in the face of standardization
At a time when the subject of purchasing power is becoming central in the face of the wave of inflation we are experiencing, it seems fair to me to recall and explain that banks in France protect savers and borrowers much more effectively than their counterparts. strangers.
If the internationalization of regulations is necessary for greater control of the risks associated with a finance industry that is global in nature, we must be vigilant that this standardization does not tend to apply all the standards of Anglo-Saxon finance. , far removed in its nature from what the French know regarding their banks: global approach to financial needs, responsibility accessible locally, support over time and universality: “everywhere and for everyone”.
Perhaps we might start by changing our vocabulary: talking less regarding “banks” and a little more regarding “our banks”?
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