On July 18, 2013, new bank legislation was adopted in France aimed at the ring-fencing and regulation of certain banking activities. The reform:
- addresses the separation of financing activities and customer services from proprietary trading activities;
- introduces a strengthened supervisory framework, including, critically, bail-in and other resolution powers; and
- provides for other consumer protection measures, such as caps on retail bank fees for certain customer transactions and increased protection of over-indebted consumers.
It also provides for increased disclosure as to banks’ and significant non-financial companies’ activities in tax havens.
Since France is one of the few European countries to have put in place bail-in measures in advance of the implementation of the European Recovery and Resolution Directive (“RRD”), this memorandum focuses on the recovery and resolution aspects of the reform.