Decision No. 2024-07 of the Governor amending Decision No. 2020-02 regarding temporary additional measures for Banque de France refinancing operations and collateral eligibility

Decision No. 2024-07 of December 2, 2024, amending Decision No. 2020-02 of April 20, 2020, regarding temporary additional measures concerning the refinancing operations of the Banque de France and the eligibility of collateral

THE GOVERNOR OF THE BANQUE DE FRANCE

Having regard to:

• the Treaty on the Functioning of the European Union, and in particular Article 127(1) and Article 127(2), first indent,
• the Statute of the European System of Central Banks and of the European Central Bank (ECB), and in particular Articles 3.1, first indent, 12.1, 14.3, and 18.2,
• ECB Guideline (EU) 2014/528 of 9 July 2014 on temporary additional measures concerning the refinancing operations of the Eurosystem and the eligibility of collateral, amending Guideline ECB/2007/9 (ECB/2014/31), as amended,
• ECB Guideline (EU) 2015/510 of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (ECB/2014/60), as amended,
• ECB Guideline (EU) 2022/989 of 2 May 2022 amending Guideline ECB/2014/31 on temporary additional measures concerning the refinancing operations of the Eurosystem and the eligibility of collateral (ECB/2022/19),
• the Monetary Agreement between the European Union and the Principality of Monaco of 29 November 2011,
• the Monetary and Financial Code, and in particular Article L. 142-8,
• the Order of 23 March 2020 granting State guarantee to credit institutions and financing companies as well as to lenders referred to in Article L. 548-1 of the Monetary and Financial Code, pursuant to Article 6 of Law No. 2020-289 of 23 March 2020 on the 2020 Finance Act (Supplementary), as amended,
• Decision D-HCSF-2021-7 of 29 September 2021 on the conditions for granting mortgage loans,
• the Governor of the Banque de France Decision No. 2015-01 of 22 April 2015 on the implementation of the monetary and intraday credit policy of the Banque de France, as amended,
• the Governor of the Banque de France Decision No. 2020-02 of 20 April 2020 on temporary additional measures concerning the refinancing operations of the Banque de France and the eligibility of collateral, as amended.

DECIDES

Article 1
Modifications

The Governor of the Banque de France Decision No. 2020-02 of 20 April 2020 on temporary additional measures concerning the refinancing operations of the Banque de France and the eligibility of collateral (hereinafter "the Decision") is amended as follows:

1. In Article 4 (BDF 1):
   a) Paragraph 1.a).i) and Paragraph 1.a).ii) are deleted; b) Paragraph 1.a).iii) is replaced by the following text:
   "State-guaranteed loans granted under Article 6 of Law No. 2020-289 of 23 March 2020 on the 2020 Finance Act (Supplementary), granted between 16 March 2020 and 30 June 2022, and meeting the following criteria:
   a. The borrower is an entity referred to in Article 3 of the amended Order of 23 March 2020; b. The borrower is not in a situation of default under Article 178 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 with the counterparty as well as, where applicable, with any other group entity in France or in another country, of which the counterparty is part;
   c. Their residual maturity is less than or equal to six years;
   d. The loans are denominated in euros; e. The loans are governed by French law; f. The loans are senior claims of banks; g. The credit quality of the borrower may be assessed either by an internal rating system ('IRB') approved by the ECAI, or by any internal rating system previously validated by the supervisor. h. The credit quality of French state-guaranteed loans disbursed for more than two months is assessed based on the borrower's solvency. In the absence of such an assessment by an internal rating system and a FIBEN rating, these loans are considered as loans with a probability of default strictly greater than 0.4%. For loans where the clause allowing the amortization of the loan over an additional period of one, two, three, four, or five years after the first year, pursuant to Article 2 of the Order of 23 March 2020, has been exercised by the borrower, the applicable haircut will be determined based on their probability of default, the share guaranteed by the French State, and the residual maturity. The table of applicable haircut rates for this category of loans is set out in Table 3 of Annex BDF bis.
   i. Restructured loans that have become sound are eligible, provided that the net guarantee rate of guarantee calls, calculated by the counterparty, is greater than or equal to 70%. This rate, hereinafter referred to as the 'residual guarantee rate', is calculated as follows:
   This formula applies taking into account the following:

   1. The nominal amount is understood as the amount outstanding at the time of the mobilization of the claim;
   2. The initial guarantee rate is understood as the rate of 70%, 80%, or 90% guaranteed by the State, as defined at the granting of the loan;
   3. Guarantee calls are understood as the amount received from the State as an advance, net of the share corresponding to the debt write-off.
      j. The calculation of the residual guarantee rate of restructured loans that have become sound determines their attachment to the lower share of 70%, 80%, or 90%. The applicable haircut for these loans will be determined based on the haircut table in Annex BDF Bis. The share of these loans must be declared according to the following correspondence:
      Residual Guarantee Rate | Attachment Share
      70% ≤ Residual Guarantee Rate ≤ 79.99% | 70% 80% ≤ Residual Guarantee Rate ≤ 89.99% | 80% 90% ≤ Residual Guarantee Rate ≤ 99.99% | 90%

2. Article 4 (BDF3) is deleted;

3. Annex BDF bis is amended in accordance with the Annex to this Decision.

Article 2
Entry into force and implementation

1. This Decision is published in the Official Publication Register of the Banque de France.
2. It enters into force on 16 December 2024.
3. This Decision is applicable in the overseas departments and regions, in Saint-Barthélemy, in Saint-Martin, in Saint-Pierre-and-Miquelon, as well as in the Principality of Monaco.

Done in Paris, on 28 November 2024

The Governor of the Banque de France
François VILLEROY de GALHAU

ANNEX

In Annex BDF bis, Table 3 is replaced by the following table:

• That is to say [0-1[ residual duration less than one year, [1-3[ residual duration equal to or greater than one year but less than three years, etc.

Residual Duration (in years) at the end of the first year *	FIBEN Rating	Probability of Default (IRB)	State Guaranteed Share
			90%	80%	70%
[0-1[	1+ / 1 / 1-	PD ≤ 0.1%	8.0%	8.0%	8.0%
	2+ / 2 / 2-	0.1% < PD ≤ 0.4%	8.8%	9.6%	10.4%
	3+ to 8 and unrated	PD > 0.4%	17.2%	26.4%	35.6%
[1-3[	1+ / 1 / 1-	PD ≤ 0.1%	11.5%	11.5%	11.5%
	2+ / 2 / 2-	0.1% < PD ≤ 0.4%	12.9%	14.2%	15.6%
	3+ to 8 and unrated	PD > 0.4%	20.4%	29.2%	38.1%
[3-5[	1+ / 1 / 1-	PD ≤ 0.1%	15.0%	15.0%	15.0%
	2+ / 2 / 2-	0.1% < PD ≤ 0.4%	17.0%	19.0%	21.0%
	3+ to 8 and unrated	PD > 0.4%	23.5%	32.0%	40.5%