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Regulated savings: Caisse des Dépôts called to order by the Court of Auditors

Published on September 06, 2022 by Pierre Belhache - 4 mins reading time
Banks Savings

In its report on regulated savings published on Monday September 5, the French Audit Office (Cour des Comptes) warns Caisse des Dépôts et Consignations (the new CDC group) about respecting the specific model of the savings fund. In particular, it fears that the transformation of CDC will lead to a "fungibilization of the savings fund as part of an overall group strategy".

Regulated savings, a French peculiarity

Regulated savings, as the Cour des Comptes reminds us in its report, is "a French peculiarity with few equivalents in Europe".

It groups together several savings products whose operating conditions are set by the government: the Livret A, the Livret bleu, the Livret de développement durable et solidaire (LDDS), the Livret d'épargne populaire (LEP), the Compte d'épargne logement (CEL), the Plan d'épargne logement (PEL), the Livret jeune and the Livret d'épargne entreprise (LEE).

The remuneration of these products is regulated by the public authorities, and "follows the general trend of interest rates and inflation". In addition, the Livret jeune, LEP, LDDS and Livret A benefit from tax and social security exemptions.

In its report, the Cour des Comptes emphasizes the stable nature of regulated savings products, which offer several advantages for banks: on the one hand, "capital is guaranteed by the State and does not weigh on their equity", and on the other, "liquidity management is the responsibility of the savings fund".

The new CDC group and its management of the savings fund

Management of the savings fund has been entrusted to Caisse des Dépôts since 1837. As the Cour des Comptes reminds us, "the loans granted by the savings fund have supported a number of major public investment policies in the general interest: social housing, rail development, electrification".

The law ensures the autonomy of the savings fund's management, and the management framework is set by an agreement between CDC and the public authorities. The French State Audit Office (Cour des Comptes) points out that CDC has undergone "several reorganizations accompanied by transfers of activities" in recent years. As a result of these transformations, the savings fund is no longer "a department in the organizational sense of the term".

Since March 4, 2020, Caisse des Dépôts has held a 66% stake in La Poste, making it the majority shareholder.

However, according to the Cour des Comptes, "CDC's far-reaching transformation into a group of activities under mandate, quasi-industrial activities with La Poste, and banking, insurance and financial activities with Banque Postale, CNP and BPI France, has shifted its business center of gravity and distorted its balance sheet structure".

While the savings fund still falls within a very specific management framework, the "global group strategy" could lead CDC to "integrate the savings fund into the group", something the Cour des Comptes warns Caisse des Dépôts against.

CDC, for its part, assured the Cour des Comptes that the savings fund was separated from its other activities by a "Chinese wall". However, the report casts doubt on this reality, explaining that there were "cross-financial relationships" between the savings fund "and the general section and even certain subsidiaries of the group".

In particular, the Cour des Comptes warns of the risk of "seeking synergies between the savings fund and the group's other entities", which could lead to attempts "to make the portion centralized in the savings fund fungible with all the resources of the public bancassurer that the CDC group has become".

However, according to the report, it is essential that the "special status" of the savings fund be preserved.