France breaks banking monopoly for alternative lenders

Author: Amélie Labbé | Published: 27 Oct 2017

A number of recently introduced laws are chipping away at the French banking monopoly, with alternative financing providers set to play a growing role providing credit to the economy.

The French government approved on October 4 an ordinance implementing the 2016 Sapin II law, covering the development of bond issues, the legal framework for security agents, and the modernisation of the legal framework for asset management and debt financing. It is expected to change the lending and transactions in debt instruments landscape significantly when it enters into force on January 3 2018.

Up until recently, in France, lending had been a regulated activity which could only be carried out by an établissement de credit - a local bank or a European bank with an EU passport. The monopoly covers the taking of deposits, and the provision of lending and payment services – in the UK and the US, for instance,...