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Business

AFP
January 12, 2018

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French credit growth worries ECB

French credit growth worries ECB

Frankfurt: Members of the European Central Bank´s governing council are concerned that rising private-sector borrowing in France could threaten financial stability, minutes from a December meeting published Thursday showed.

"It was remarked that loan growth in the euro area´s second largest economy had seen rather buoyant expansion," according to the minutes, which never identify individual speakers.

"Increasing leverage in conjunction with increased merger and acquisition and leveraged buyout activity raised concerns from a financial stability perspective," the record added.

The rate of credit growth to non-financial businesses across the whole eurozone picked up to 3.1 percent year-on-year in November, a regular ECB survey recently showed.

In France, firms´ demand for loans leapt in the months following the election of President Emmanuel Macron, who swept to power in May on a platform of rejuvenating the economy and reorganising the 19-nation eurozone.

July brought increases of more than 25 percent in demand for credit among both large and small-to-medium sized firms, Bank of France figures show, with a further 22-percent boost for big companies in October.

Stoking increased lending across the single currency area has been one of the ECB´s top priorities in recent years.

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