Finance
France to drop extra capital demand for banks exposed to indebted companies
Published by Global Banking & Finance Review®
Posted on June 2, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 2, 2025
2 min readLast updated: January 23, 2026
France will not renew the extra capital demand for banks exposed to indebted companies, impacting major banks like BNP Paribas and Societe Generale.
PARIS (Reuters) -France will not renew a two-year measure that required its biggest banks including BNP Paribas and Societe Generale to hold extra capital against their exposure to highly indebted companies, the financial stability council said on Monday.
The measure, put in place in August 2023, requires the French lenders, which also includes Credit Agricole and BPCE, to hold more capital when their exposure to a single large company with high debt levels exceeds 5% of their core capital, or CET1.
In such cases, banks must set aside an extra 3% of that exposure in top-tier capital.
The year 2023 was marked by heavy debt restructurings in France, including high-profile cases like retail group Casino. The need to simplify macroprudential rules and lower debt levels today at the affected companies justifies dropping the measure, an official at the finance ministry said.
The council, which is chaired by Finance Minister Eric Lombard and includes the central bank governor, also said it would maintain the so-called countercyclical capital buffer at 1.0%, as it did not see the measure negatively affecting new loan production.
(Reporting by Mathieu Rosemain;Editing by Tommy Reggiori Wilkes, Charlotte Van Campenhout)
France will not renew a two-year measure requiring its largest banks to hold extra capital against their exposure to highly indebted companies.
Banks were required to set aside an extra 3% of their exposure in top-tier capital when dealing with a single large company with high debt levels.
The council has decided to maintain the countercyclical capital buffer at 1.0%, as it did not see a need for changes.
The measure affected major French banks including BNP Paribas, Societe Generale, Credit Agricole, and BPCE.
The year 2023 was marked by heavy debt restructurings, including high-profile cases like the retail group Casino.
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