Opinion of the European Central Bank of 7 June 2018 on a modification of the remuneration formula of the French livret A and certain other French regulated savings accounts (CON/2018/28)
Date: 2018-06-07
Institutions: European Central Bank
Subjects: France, financial stability, national law, savings, savings bank

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 June 2018 

on a modification of the remuneration formula of the French livret A and certain other French 

regulated savings accounts 

(CON/2018/28) 

Introduction and legal basis 

On  7  May  2018  the  European  Central  Bank  (ECB)  received  a  request  from  the  French  Ministry  of 
Economy and Finance for an opinion on a draft regulatory provision (hereinafter the ‘draft amendment’) 

amending the remuneration formula in respect of the livret A, as well as the comptes spéciaux sur livret 

du crédit mutuel, the livret d’épargne populaire, the livret d’épargne-entreprise and the compte d’épargne-

logement  (together  the  ‘related  savings  accounts’).  Each  of  the  related  savings  accounts  is  a  type  of 

French regulated savings account which has a remuneration rate linked to that of the livret A. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  and  the  third  and  sixth  indents  of  Article 2(1)  of  Council 
Decision 98/415/EC1,  as  the  draft  amendment  relates  to:  (a)  the  basic  task  of  the  European  System  of 

Central  Banks  (ESCB)  of  implementing  the  monetary  policy  of  the  Union  pursuant  to  the  first  indent  of 

Article 127(2) of the Treaty; (b) the Banque de France; and (c) the rules applicable to financial institutions 

insofar  as  they materially  influence the  stability of financial institutions  and  markets. In accordance  with 

the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing 

Council has adopted this opinion. 

1. 

Purpose of the draft amendment 

1.1  The  purpose  of  the  draft  amendment  is  to  modify  the  calculation  formula  for  setting  the  annual 

remuneration rate of the livret A and the related savings accounts. 

1.2  The  current  formula,  which  was  set  in  November  2016,  is  disapplied  for  the  period  from 

1 February 2018 to 31 January 2020. Under this formula the remuneration rate of the livret A was 

the higher of: (a) the French inflation rate, measured as the six-month average of the percentage 

change in the INSEE consumer price index over the latest available 12 months, and the six-month 

average EONIA rate, combined and then divided by two; or (b) the inflation rate mentioned under 

(a) increased by 0.25%, except in situations where the difference between the money market rate 

and the inflation rate mentioned under (a) is more than 0.25%. Until 31 January 2020, the rate is 

frozen at 0.75 %. 

1  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
                                                 
ECB-PUBLIC 

1.3  The main purpose of the draft amendment is to set from 1 February 2020 the remuneration rate of 

the livret A to the higher of: (a) the French inflation rate, measured as the six-month average of the 

percentage  change  in  the  INSEE  consumer  price  index  over  the  latest  available  12  months,  and 

the  six-month  average  EONIA  rate,  combined  and  then  divided  by  two;  or  (b)  0.5%.  The  draft 

amendment also reduces the rounding of the calculation formula result to the number that is one-

tenth of a percentage point nearest or immediately higher (as against one-quarter of a percentage 

point  previously).  Finally,  from  1  February  2020,  the  draft  amendment  temporarily  sets  the 

maximum  change  in  the  remuneration  rate  between  two  successive  calculation  periods  to  0.5 

percentage point until the calculation formula gives two successive results with a difference of less 

than 0.5%. 

1.4  As  noted 

in 

the  consultation  request, 

the  French  authorities 

intend 

to 

implement 

the 

abovementioned modification in order to reduce the divergence between money market rates and 

the remuneration rate of the livret A and related savings accounts (which the previous inflation floor 

in the remuneration formula did not allow).  

2. 

General observations 

2.1  The  ECB  reiterates  that  it  is  generally  not  in  favour  of  regulating  savings  remuneration,  as  this 

derogates  from  the  principle  of  an  open  market  economy  with  free  competition,  and  presents 

challenges  for  the  efficient  transmission  of  monetary  policy  and,  to  a  certain  extent,  for  financial 
stability2.  The  discrepancy  between  money  market  rates  and  the  regulated  rates  may  generate 

liquidity costs for banks, thus potentially impeding their financial intermediation role and the stability 

of the banking system.  

2.2  The  draft amendment maintains  a regulated level of remuneration for the  livret A  and  the  related 

French savings accounts. The replacement of the inflation-linked floor by an ex ante 0.5% arbitrary 

floor  will  in  certain  circumstances  contribute  to  reducing  the  divergence  between  money  market 

rates and the remuneration rates. It however does not remove the concern that the remuneration of 

these savings accounts may diverge markedly from money market rates and thereby continues to 

raise concerns as regards the efficiency of monetary policy transmission. 

2.3 

In line with its earlier opinion on this subject matter3, the ECB reiterates its reservations as regards 

the  tasks  that  have  been  historically  exercised  by  the  Banque  de  France  and  its  Governor 

regarding the livret A and related savings accounts, which are not modified by the draft amendment 

and which would therefore resume on 1 February 2020. 

2.4  Finally, regarding the temporary corridor of 0.5 percentage point within which the remuneration rate 

may  fluctuate  between  two  successive  calculation  periods,  the  ECB  understands  that  once  this 

temporary corridor expires upon there being a differential of less than 0.5%, the corridor of plus or 

minus 1.5% established under the current disapplied formula would be restored. 

2  
3  

See paragraph 2.2 of Opinion CON/2016/51. 
See paragraph 2.5 of Opinion CON/2016/51. 

2 

 
 
                                                 
This opinion will be published on the ECB’s website following its adoption and in any case no later than 

six months following its adoption.  

ECB-PUBLIC 

Done at Frankfurt am Main, 7 June 2018. 

[signed] 

The President of the ECB 

Mario DRAGHI 

3