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25 March 2009

Commission authorises amendment to French scheme to inject capital into certain credit institutions


Commission approved the amendment to inject capital into credit institutions which relates to terms governing the remuneration and reimbursement of the preference shares issued by beneficiary banks in return for recapitalisation by the Stat

The Commission approved an amendment to the French scheme to inject capital into credit institutions which relates to the terms governing the remuneration and reimbursement of the preference shares issued by the beneficiary banks in return for their recapitalisation by the State.

 

On 16 March, the French authorities formally notified an amendment to the capital-injection scheme for certain credit institutions. The scheme underwent a first amendment to give the beneficiary banks the option, as part of a second tranche of operations, of either issuing subordinated debt securities on the same terms as for the first tranche or issuing preference shares. The second amendment relates to the terms governing the remuneration and reimbursement of the preference shares.

 

The Commission has concluded that the amendment to the capital-injection scheme is an appropriate, necessary and proportionate means of restoring confidence to financial markets and enabling French banks to increase lending to the real economy.

 

In particular, the Commission has concluded that the level of remuneration of the preference shares provides adequate remuneration for the State and will ensure that state involvement in the banks' capital will be as brief as possible given that the amount to be reimbursed will increase significantly over time.

 

Press release

 



© European Commission


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