French Credit Institutions’ Secrecy and Prudential Requirements

Importance of Banking Secrecy and Prudential Regime Requirements

A recent update on the means of payment issued by member credit institutions has highlighted the importance of banking secrecy and prudential regime requirements in France. According to industry experts, the overall net balance of factoring operations is calculated by subtracting drawings and commissions due from total collections on discounts left in account.

Deposit Insurance and Guarantee

It’s worth noting that deposits are covered up to EUR100,000, but there is a right to an increase in the limit of the guarantee up to EUR500,000 for three months from the date of credit if any sum constitutes an exceptional and temporary deposit.

Banking Secrecy Requirements

French law imposes strict banking secrecy requirements on credit institutions. Under Article L. 511-33 of the French Monetary and Financial Code, banks are prohibited from disclosing confidential information collected from clients, including: * Account balances * Transactions * Other sensitive data

The scope of this secrecy extends to all confidential information received from clients in France.

Exceptions to Banking Secrecy

The disclosure of protected data is only permitted under certain circumstances, such as: * Communicating with rating agencies for the purposes of rating financial products * Negotiating, concluding, or executing certain transactions However, credit institutions are not exempt from disclosing confidential information in cases where authorities require it, including criminal proceedings.

Prudential Regime Requirements

French credit institutions are also subject to prudential regime rules aimed at ensuring their stability and solvency. These regulations include: * Minimum capital requirements (e.g., EUR5 million or EUR2.2 million for financing companies) * Liquidity controls * Risk management measures

Additional Prudential Requirements for Systemically Important Financial Institutions (SIFIs)

French SIFIs are subject to additional prudential requirements determined by the authorities.

Rules on Liquidity and Risk Control

The prudential regime also includes rules on liquidity and risk control, which require credit institutions to: * Maintain sufficient liquid assets to meet their financial obligations * Manage risks effectively

Consequences of Violations

Violations of banking secrecy or prudential regime requirements can result in severe penalties, including: * Criminal sanctions * Disciplinary actions