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About Frank Vogl's "The Enablers. How the West supports kleptocrats and corruption -endangering our democracy" - A Financial and Political Economy of Corruption

By François Valérian
November 2021
Frank Vogl's latest book exposes, based on a very rich documentation, a financial and political economy of corruption. The author's background has given him first-hand knowledge of many of the problems and issues he deals with. As a journalist, former World Bank executive, co-founder of Transparency International, and academic, he has been able to observe and ...
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The troubling resilience
of the offshore centers

By François Valérian
June 2021
After a decade of global crackdown on offshore centers, four of them, Luxembourg, Bermuda, the British Virgin Islands and the Cayman Islands, have slightly increased in importance in global finance, accounting for about 15% of global cross-border investment flows in 2019. All major banks and most major mining conglomerates have significant relationships with them. ...
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Debt designed to be stolen.
A new way to embezzle public money?

By François Valérian
November 2020
On October 22, 2020, Goldman Sachs entered into a settlement with the U.S. Department of Justice to end the lawsuit against the bank in connection with the Malaysian "1MDB Fund". Two figures in the agreement may seem surprising. Goldman Sachs and its business partners allegedly paid $1.6 billion in bribes to obtain $606 million in fees on transactions. ...
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Is there room for the long term
in market financing?

By Alexis Collomb
November 2019 - Réalités Industrielles
The financial markets have often been criticized as places where only profits count, where the dictates of short-term earnings override long-term interests. This article focuses on equity markets in order to weigh several factors and see whether these markets are inherently incompatible with the long run. After considering how the theories of agency and efficient markets have ...
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The real effects of long-term investors
in listed companies

By Alexandre Garel
November 2019 - Réalités Industrielles
To review the academic literature in finance on long-term investors, the role of shareholders, in particular institutional investors, is highlighted. Three points are broached: What is a long-term investor? What are the theoretically possible relations between an investor’s investment horizon and corporate decisions? And what do we learn from empirical studies about the real ...
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Financial markets
and
short-termism

By Christophe Moussu
November 2019 - Réalités Industrielles
The debate about the “short-termism” induced by the financial markets has gone viral. The usefulness of these markets has come under question along with the goal of maximizing shareholder value. After recalling how these markets are beneficial to business investments, attention is focused on how they give rise to problems of governance, in particular short-termism. ...
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The role of central banks and supervisory authorities in stimulating consideration for
long-term issues: The case of climate change

By Nathalie Aufauvre & Clément Bourgey
November 2019 - Réalités Industrielles
Economic agents often think, decide and act with a relatively short-term view — in any case, too short to take account of long-term issues and risks. Central banks and supervisory authorities have a decisive role in leading these agents to reckon with long-term risks. Climate change provides a very good example, since coordinated international actions by these banks and ...
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What can institutional investors do
in matters related to
climate change and responsible investments?

By Jean-François Boulier
November 2019 - Réalités Industrielles
Institutional investors, everywhere around the world, are involved in the long-term financing of the economy — in France to the tune of approximately €3200 billion (more than a year of GNP), an amount that has constantly grown over the past decades. Dutch retirement funds alone manage the equivalent of more than two years of their country’s GNP. ...
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From ESG ratings to stress tests
aligned with the Paris Agreement
and sustainable development goal

By Anne-Catherine Husson-Traore
November 2019 - Réalités Industrielles
Based on declarations and on multiple criteria for environmental, social and corporate governance, ESG ratings for big firms emerged at the turn of this century. The result is a database, big but barely legible because it has not been standardized. Firms determine the information (scope, methodology and indicators) to provide, thus making it nearly impossible to make ...
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The long-term coherence of cooperatives
is more a matter of principles than facts

By Pierre-Charles Pradier
November 2019 - Réalités Industrielles
Cooperatives are organizations with, in principle, a democratic governance; but they can be legally organized in quite varied forms, which, in turn, condition the potential expression of short-termism. When the profits placed in a reserve fund cannot be “shared” (nor directly appropriated), a short-termism specific to cooperatives might arise. ...
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Corporate reform:
From the firm or from the field?

By Cécile Renouard
November 2019 - Réalités Industrielles
How to interpret the aspects of the French PACTE Act related to a firm’s economic, social and environmental responsibilities? An analysis of the act and of the recommendations made in the Senard-Notat Report brings to light the limits of the commitments demanded from firms in matters related to social and environmental issues and the climate. What if we shift ...
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Firms with a mission
as a vector of the long term

By Blanche Segrestin, Laure-Anne Parpaleix
November 2019 - Réalités Industrielles
Since short-termism has come under criticism, how can a firm’s strategic choices take account of long-term interests? Can long-term shareholding be fostered, and would it suffice? To answer these questions, this article examines how we apprehend the long term. Instead of defining it in relation to the investment horizon of a firm’s plans, innovation forces us to see the long term as ...
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Can companies finance
long-term environmental transitions?

By Claire Tutenuit
November 2019 - Réalités Industrielles
Industrial, service or financial companies are keen to raise funds to invest in the transformation of society in order to preserve the climate and biodiversity. There is a pressing need and therefore enormous opportunities. On the other hand, these types of investments are generally not economically viable due to their often unattractive risk/reward ratio. ...
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Impact investing:
the role and effectiveness of funds

By Isabelle Guénard-Malaussène
November 2019 - Réalités Industrielles
In light of the urgency surrounding issues relating to the climate, pollution, biodiversity and all forms of inequality, finance must also contribute to changing the world. While some players are prepared to go “green” and inject humanism into their rhetoric, products and services, the financial ecosystem needs to make a genuine commitment and provide tangible proof of its implication. ...
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Large US digital firms:
new systemic players in international finance?

By Paul-Adrien Hyppolite and Antoine Michon
November 2019 - Réalités Industrielles
As a result of their unprecedented commercial success, large US-based technology firms have, over the past two decades, built up huge cash reserves, which are comparable to those of the world's largest bond funds. In this article, we will show that this situation is the result of ultra-conservative management of their capital, which contrasts with their image of cutting-edge innovators. ...
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Sustainable behaviour and value creation:
communication to the financial markets

By Jean-Brieuc Le Tinier
November 2019 - Réalités Industrielles
From a uniquely financial standpoint, businesses aim to create value and therefore make investments whose generated rate of return is higher than the rate of return required by contributors of financial resources, factoring in the risks taken. This means that listed companies are bound by this profitability goal demanded by shareholders. ...
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Green bonds, an instrument for financing
the environmental transition

By Franck Bancel and Dejan Glavas
November 2019 - Réalités Industrielles
The environmental transition needs major investments to make production carbon-free. For more than a decade, the green bond market has been growing to meet the needs of investors and issuers in the effort to fight global warming. This paper addresses the following questions: Do these green bonds differ from conventional bonds? Why do firms issue them? ...
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Finance, business and the long term

By Claire Castanet
November 2019 - Réalités Industrielles
It is often remarked that capital markets force companies into short-term strategies. Yet finance is not entirely synonymous with the short term, since there are long-term investors who want to provide long-term support for companies. A company that is committed to the long term, however, must also be run by women and men whose concerns must not be reduced...
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“Intérêt social” and “raison d’être”:
Thoughts about two core provisions of the Business Growth and Transformation Action Plan (PACTE) Act that amend corporate law

By Alain Pietrancosta
November 2019 - Réalités Industrielles
The Business Growth and Transformation Action Plan (PACTE) Act of 22 May 2019 has the clear goal of “reviewing the position of businesses within society”. Along with the introduction of a special “société à mission” (similar to a community interest company) status, it makes two major amendments to French corporate law in its Article 169, one of which is mandatory...
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Risks and the government of firms

By François Valérian
November 2019 - Réalités Industrielles
Due to risks of misconduct by company managers, corporate government should be reformed along the lines of a separation of powers and with the creation of a new position, namely that of risk and compliance officer reporting directly to the board of directors.

...
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The EU Directive on preventive restructuring frameworks –
a chance for France to focus on the long term?

By Sophie Vermeille and Eva Fourel
November 2019 - Réalités Industrielles
The directive adopted by the Council of the European Union on 6 June 2019 offers France the opportunity to make a paradigm shift towards effective legislation for companies in difficulty. For the moment, French law conflates the goal of efficiency with that of equity, favouring short-term job preservation and thus penalising the French economy. It is important to understand that effective...
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Family Firms versus Private Equity:
A struggle of business models?
The example of the German printing industry

By Ida Bagel and  MichaelTroege
November 2019 - Réalités Industrielles
With the growth of the Private Equity (PE) industry an increasing number of firms remain for substantial periods in the ownership of PE companies. Today, PE owned companies are important and permanent competitors for many traditional Family Firms.
The financial and commercial strategies of both types of firms differ substantially. ...
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Financial Regulation and Externalities:
Efficiency vs Politics

By  Gérard Hertig
November 2019 - Réalités Industrielles
Fundamentally, financial regulation aims at facilitating access to finance.
From an efficiency perspective, this means that entrepreneurs as well as consumers should get financing at competitive rates. However, the rewards of financial regulation are not necessarily equally distributed, an externality that is likely to favor some financial intermediaries or industrial firms ...
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Research in finance:
When performativity leads to reflexivity

By Hélène Raineilli-Weiss
March 2019 - Gérer & Comprendre
To assess the impact of research in finance over the past sixty years, how to measure the effect of theories on practices, on the financial industry’s growth and, too, on the social norms and institutional arrangements that organize the realm of finance? This article’s principal contribution is to insist on the role of theory in the social construction of finance and on the necessity for financial theory ...
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Digital agility in financial firms

By Emmanuel Yoo
February 2019 - Réalités Industrielles
Agile methods appear to be the new paradigm for banking. According to most banking organisations, agility is now the key issue. This enthusiasm is attributable to the promised benefits of agility, which make it a workhorse in terms of internal communication and to attract new talent. However, implementing agile methods means defining new operating modes and ...
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The banking sector,
in the midst of a transformation

By Nicolas Denis
February 2019 - Réalités Industrielles
The banking sector is in the midst of a period of transformations. Facing stiff competition in its historical markets and business lines, it must understand and respond to the challenges of reinvention, while also developing its status as a trusted third party. In this era of commoditisation and lack of trust, banks and the banking profession in general must transform themselves ...
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Investment banking:
New paradigms and new forms of technology

By Laurent-Olivier Valigny
February 2019 - Réalités Industrielles
The Nora-Minc report on the computerization of French society — now more than forty years old — prophetically compared banks to “tomorrow’s iron and steel industry” as it discussed a saturated market, production overruns, insufficient equity, production costs and disruption due to telematics and computers. The current digital revolution has overtaken investment banking — ...
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The impact of the Internet of things on financial services: The insurance industry

By Patrick Durand and Laurent Félix
February 2019- Réalités Industrielles
The Internet of things (IoT) has advanced during the last ten years. It now compels recognition as a phenomenon disrupting many a sector. Manufacturers, the first to realize this, were soon joined by financial services. In finance, the majority of IoT projects are being conducted in the insurance industry (in particular: use cases in insurance for automobiles, ...
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Digital technology:
What risks and opportunities
for insurance companies?

By Thierry Martel
February 2019- Réalités Industrielles
Digital technology is disrupting the value chain in insurance. The client/insurer relationship is changing all along the line; but the moment of truth arrives whenever an accident occurs, a situation that digital technology helps us manage much better. The previous barriers to market entry have often become a competitive disadvantage, since they force insurers to devote substantial...
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Technology at the service of market oversight

By Iris Lucas
February 2019 - Réalités Industrielles
Several changes during the past few years have left marks on the financial markets: fragmentation, digitization, algorithmic high-frequency trading. Concomitant with a considerable increase in the volume of market data, these phenomena have pushed regulatory authorities to overhaul and modernize their systems for detecting violations. ...
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Issues of regulation and oversight
in relation to FinTechs and the digital revolution

By Pierre Bienvenu
February 2019 - Réalités Industrielles
The digital revolution is disrupting the financial sector: competition is increasing while uses and practices, as represented by FinTechs, are changing fast. All stakeholders in finance must adapt to a market in the throes of change. New uses are diffusing faster. The lowering of technological barriers is stimulating competition, while changes in regulations are making it ...
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FinTechs and banks:
Cooperation and coopetition

By Dominique Chesneau
February 2019 - Réalités Industrielles
Between FinTechs and banks, the die has not yet been cast. Some observers think that the days of the “banking mammoths” are numbered; others, that FinTechs will be disruptive enough to become dominant players in finance. However the future of finance implies cooperation between players on this market, even though competition will exist as long as market positions ...
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The digital economy is storming finance

By Alain Clot
February 2019 - Réalités Industrielles
Till recently, the “universal bank” was the dominant model, long protected by regulations and shielded by customer loyalty. In a challenge to this model, FinTechs, a new category of players, have introduced innovations and are gradually becoming service platforms. Operators in telecommunications and big retail chains, as they try to lessen the attrition of their ...
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Margo Bank, a European bank
for new generation SMEs

By Jean-Daniel Guyot
February 2019 - Réalités Industrielles
Margo Bank is striving to set up a responsive and human bank that uses technology to bolster customer relations. To better address the financial support and digital transition issues faced by European SMEs, three entrepreneurs have decided to build a new bank from scratch.
By building its own tech stack and recasting its organisational structure and processes, ...
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Cryptocurrencies: principles and challenges
What are they for? How do they work?

By Arthur Breitman
February 2019- Réalités industrielles
The origins of cryptocurrencies are both political and technological. To understand their purpose and usefulness, we will present these two origins by looking first at their ideological roots, then by briefly describing the cryptographic and information technologies used in rolling out blockchain solutions.
...
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Regulating finance in the 21st century

By François Valérian
February 2019 - Réalités Industrielles
Finance – a swiftly-evolving area of global importance – is difficult to regulate. Regulation is needed, however, as finance affects the entire economy. The 2008 crisis gave fresh impetus to far-reaching regulatory plans and sharply highlighted the problems inherent in attempting to rein in a worldwide phenomenon from a fragmented political space. ...
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Account aggregators and payment initiators, providing fresh impetus for banks

By Rémi Steiner
February 2019- Réalités industrielles
A large share of Fintech companies are active in the field of payment services. The European Commission has taken note of their expansion, driven both by the immediate interest of consumers in cheaper and more innovative financial services and by the belief that the harmonisation of payment services is a prerequisite to the creation of a digital single market. ...
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Artificial intelligence applied to the finance sector: contractual challenges and liability scenarios

By Marie Danis, Charles Bouffier and Thomas Feigean
February 2019 - Réalités Industrielles
Artificial Intelligence (AI) is spreading to all corners of the economy and, in particular, to the finance sector. Together with the promise of new services, this technology also carries legal risks as there is some uncertainty surrounding the outcomes of the processing it performs. As a result, FinTech companies, which develop tools with AI systems embedded, and banks, which acquire ...
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Finance and Artificial Intelligence (AI):
from an industrial revolution to a human revolution…. a thorough overhaul is required…

By Jean-Philippe Desbiolles
February 2019 - Réalités Industrielles
(Industrial) revolutions come and go but finance remains. Today, in the era of Artificial Intelligence (AI), what changes should the finance industry expect? To answer this, we must first consider the causes of this new revolution, which is industrial only in name, so as to gauge, next, the scope of the changes it will bring about. These range from customer experience to human capital, ...
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Crowdfunding, a fresh source of financing
for SMEs

By Olivier Goy
February 2019 - Réalités Industrielles
Crowdfunding provides an amazing opportunity for both businesses and entrepreneurs. Following fast expansion in English-speaking countries, it spread to mainland Europe. It gained a reputation for donations but gradually evolved to cover equity financing and loans.
The most thriving segment of this new form of financing is crowdlending. The latter ...
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Big data in the banking universe

By Laurence Le Buzullier
February 2019 - Réalités Industrielles
The web giants have revolutionised the use and storage of data: big data.
Nowadays, all data is saved in “data lakes”. These enormous containers of structured and unstructured data (such as videos and text) replace the former data warehouses. The cloud enables access to such huge volumes of data, while also reducing the technology costs borne by companies. ...
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New challenges for financing the economy

By Marie-Anne Barbat-Layani
August 2018 - Réalités Industrielles
Contrary to other euro area countries, the credit crunch overlooked France during the financial crisis. Levels of access to credit remained very high, backed by positive lending conditions. France was also the sole euro area country where the taxpayer was spared the cost. French banks weathered the crisis well, enjoying higher and less volatile returns than those of their European ...
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Banks since the meltdown

By Jean Beunardeau
August 2018 - Réalités Industrielles
In general, economic and banking crises are triggered by the financing of unprofitable investments, which result in credit losses. The 2008 financial meltdown was no exception and, owing to its severity, governments and regulatory authorities had to recast the banking industry’s regulatory framework. This involved higher prudential ratios, amended rules for the calculation of ...
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The Cost of Regulation

By Michala Marcussen
August 2018 - Réalités Industrielles
Tighter regulation inevitably carries a cost, but must be weighed against the benefits of greater financial stability. Estimating net benefits is, however, a complex exercise and while consensus is that in aggregate these remain positive, gains could be made by improving efficiency and addressing leakages. Moreover, structural reform, and not least completing the European Banking and ...
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Fiscal innovation to make European banks
more stable and competitive

By Michael Tröge
August 2018 - Réalités Industrielles
Following a series of tax and accounting reforms since the 1980s, the corporate tax system now favours debt financing. This pro-debt bias forces banks, in particular, to take on very high levels of debt to remain competitive. Recent empirical research has shown that this mechanism is one of the primary causes of the financial system’s weakness. However, there are simple tax or ...
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Bank capital and RoE: erroneous beliefs
and financial instability

By Christophe Moussu
August 2018 - Réalités Industrielles
Since the crisis, banks’ beliefs regarding optimal capital levels and performance objectives have clearly not changed significantly. Yet a substantial body of academic research on bank capital has shown that the banks with the highest capital levels are more resilient to shocks, are more efficient, gain more market share and command the highest valuations ...
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Over-regulation in the insurance industry

By Arnaud Chneiweiss
August 2018 - Réalités Industrielles
French insurance companies are faced with a “regulatory avalanche”, an unprecedented accumulation of uncoordinated standards. This over-regulation, at national, European and international levels, is somewhat of a tribute to the key role this industry plays in contemporary society. However useless regulations can hamper both growth and innovation. ...
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Post-crisis Regulation
of Asset Management

By Luca Enriques and Gérard Hertig
August 2018 - Réalités Industrielles
While asset managers’ behavior has not been among the root causes of the financial crisis, their industry’s size and structure have generated financial stability concerns among policymakers. Global regulatory bodies nowadays agree that asset management activities are “systemically important.” On the other hand, the growth in retail activities has prompted ...
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Financial crisis and depression:
Are there lessons to draw
from the Great Depression?

By Pierre-Cyrille Hautcoeur
August 2018 - Réalités Industrielles
This paper compares the crises of the 1930s and 2008 on two points: firstly, policymakers’ reactions at the height of these two banking and financial crises (reactions that differed substantially, notably thanks to the experience gained from the Great Depression in both the US and Europe); secondly, the financial regulations implemented in the wake of each crisis. ...
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Are banks and markets true alternatives
for financing the economy?
By Laurent Grillet-Aubert
and Pierre-Emmanuel Darpeix
August 2018 - Réalités Industrielles
In contrast with bank lending, financial markets theoretically allow for the disintermediated allocation of savings for investment. Post-financial crisis policies such as the Capital Markets Union (CMU), the reform of securitisation, expansionary monetary policies, etc., have bolstered the reliance on market-based financing, particularly for debt financing. ...
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The Capital Markets Union:
Background and Challenges

By Christian de Boissieu
August 2018 - Réalités Industrielles
The Capital Markets Union (CMU), together with the Banking Union, is a major programme of financial Europe. Its objective is to boost investment, growth, and employment through increased efficiency and deepened integration of European financial markets. This article will first review the CMU’s objectives, ways, and means, and will then touch upon the ...
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The retreat from systemic risk regulation:
what explains it?
(and why it was predictable)

By John C. Coffee, Jr.
November 2018 - Réalités Industrielles
Financial crises usually trigger a predictable cycle: first, a populist outburst that produces dramatic legislative and regulatory changes and, then, a slower counter-reaction as the financial industry gradually subjects the new reforms to a death by a thousand cuts, often with the result that little remains. This cycle - here called the “Regulatory Sine Curve” - can be traced back to the South Sea Bubble in ...
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Delegating Regulation: European Union
and Financial Markets

By Sharyn O’HALLORAN, Karen CHEN and al.
November 2018 - Réalités Industrielles
This paper analyzes the design of financial regulatory structure in the European Union. We develop a two-pronged approach to track changes in decision-making authority in EU financial market regulations and directives enacted from 1964 to the present. Traditional observational data collection methods manually code laws to identify the amount of discretionary authority delegated to ...
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Can post-crisis regulation help mitigate the risks created by systemic institutions?

By Olivier de Bandt
August 2018 - Réalités Industrielles
The 2008 crisis was marked by large-scale government interventions to rescue systemic institutions. Injections of capital to some institutions have increased public deficits and, although they curtailed the impact of systemic shock, they fostered moral hazard. Systemic financial institutions are defined here as institutions with a "systemic impact", that is, those whose difficulties...
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Including macro-prudential strategies
in Euro-area macroeconomic policy

By Agnès Bénassy-Quéré
August 2018 - Réalités Industrielles
In the wake of the 2008 financial crisis and especially the euro area crisis, several innovations – including macro-prudential policies and a macroeconomic imbalance procedure – were included in Europe's economic policy structure. However, their coordination and surveillance mechanisms could be better interconnected. The goal, instruments, horizon and summary...
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Learning small lessons from a great crisis

By Jean-François Boulier
August 2018 - Réalités Industrielles
In the words of Nietzsche, “What does not kill me, makes me stronger”.  But are we really stronger after having emerged from this great crisis? Have we learned all there is to learn? How can we prepare for the next crisis that is sure to happen one day? I believe that now is the time to step back and try to take a more positive look at these historic events.
...
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Banks and tax havens
By Vincent Bouvatier, Gunther Capelle-Blancard
and Anne-Laure Delatte
August 2018 - Réalités Industrielles
Since the 2008 financial crisis, a string of scandals – UBS in 2008, Offshore Leaks in 2013, Lux Leaks in 2014, Swiss Leaks in 2015, Panama Papers and Football Leaks in 2016, Paradise Papers in 2017 – have brought to light the role played by banks in tax avoidance, money laundering, setting up shell companies, and circumventing international regulations. ...
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Crisis and cooperative solutions:
the euro area since 2008

By Jérôme Creel
August 2018 - Réalités Industrielles
Since the European integration process began, the European Union has always moved forward in fits and starts, from one crisis to the next. But, the most-recent crisis showed up fault lines in its economic governance.
The euro area was seriously affected by the US banking crisis which started in September 2008.
...
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Preventing systemic risk

By Jean-François Lepetit
August 2018 - Réalités Industrielles
The 2008-2011 crisis provided a rationale for regulating credit intermediation by banks, which reduces, as much as possible, the risk that such intermediation will result in a systemic crisis. This is a welcome outcome. However, ring-fencing the banking function has expanded the role of market intermediation under conditions that make this mode of credit intermediation ...
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The complexity of the regulatory response
to the crisis

By Pierre-Charles Pradier
August 2018 - Réalités Industrielles
While the 2008 financial crisis originated and first erupted in the United States, the response was organised on a global scale. After Lehman Brothers filed for bankruptcy on 15 September and an emergency bailout plan for AIG was announced the next day, the G7 Finance Ministers meeting scheduled for October seemed to be too little, too late for Gordon Brown, Angela Merkel and Nicolas Sarkozy, ...
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Regulating FinTech and "FinTechifying" regulations

By Héloïse Berkowitz and Antoine Souchaud
August 2018 - Réalités Industrielles
The word "FinTech" conjures up a sort of hybrid monster. It resembles the Minotaur, a construction involving two protean elements that, taken separately, arouse hope and fear in equal measure. Regulating FinTech will require an ability to define unstable phenomena, to create policy networks and forms of innovative organisations between emerging stakeholders and, lastly, to factor ...
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Big data, pooling risks
and exclusion in the insurance industry


By Rémi Steiner
June 2018 - Digital issues
In a market economy, the theory of insurance leads insurers to set the premiums for policies as a function of the risks specific to policyholders. A hard question thus crops up: how to segment risks (an action reducing the effects of pooling risks) so as to keep clients from taking their business to competitors? Answering this question involves big data, a phenomenon referring to:
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The introduction of cognitive technology
at Crédit Mutuel

By Frantz Rublé
March 2018 - Digital Issues
Even as the digital transition is changing the behavior patterns of its shareholding customers, as its account advisors need everyday assistance in order to provide better services to customers, and as the first cognitive computing solutions based on IBM’s Watson technology are emerging, the Crédit Mutuel, a mutualist bank in France, is working with IBM to develop the first AI ...
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Artificial intelligence
and insurance

By Patrick Dixneuf
March 2018 - Digital issues
Its use as a catchword should not keep us from seeing that artificial intelligence is attaining the stage of growth for an industrial and commercial rollout. AI is deeply changing many business processes as well as relations with customers and employees. How is the insurance industry to cope with these innovations? First of all, like other branches of the economy, it must assess the effects ...
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Artificial intelligence
and customer protection in the banking
and insurance industries

By Olivier Fliche
March 2018 - Digital issues
The financial, banking and insurance industries are in the throes of deep changes as a result of the explosion of customer data, now available for processing, and the use of artificial intelligence. New products, new customer relations… the changes to come will bring progress, the first signs already visible. But these changes are also laden with risks for customer relations...
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Finance and artificial intelligence:
A revolution on the march

By Claire Castanet & Camille Planes
March 2018 - Digital issues
After a few years on the outside, artificial intelligence (AI) has once again hit the headlines, raising hopes for a revolution in several sectors. It is benefitting from the combined effects of the exponential growth in computing power and the availability of a wealth of data spawned by the Internet and social media. The financial industry, which depends on its capacity for capturing and ...
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A whale in shallow waters:
JPMorgan Chase, the “London Whale”
and the organisational catastrophe of 2012

By François Valérian
November 2017 - Réalités Industrielles
The case of the so-called “London Whale” cost US bank JP Morgan Chase & Co. more than $6bn. The hearings held by the United States Senate enabled this case to be carefully documented, and shed light on the errors committed by an organisation that believed it was implementing an innovative, profitable hedging strategy – but was actually taking risks that were significant and very poorly....
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Orange Bank:
The first telecom-bank

By Jean-Bernard Mateu
November 2017 - Réalités Industrielles
In a rapidly-changing world of banks, customers and technology, the Orange Group decided to launch a native mobile banking system that offers an incomparable user experience. To do so, Orange was able to draw on a set of unique strengths: a strong brand that embodies key values such as security and reliability, a solid distribution network, the Group's capital base and, ....
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Vulnerable populations:
An overview of La Banque Postale's experience providing universal banking accessibility

By Didier Brune
November 2017 - Réalités Industrielles
Like all other banking institutions, La Banque Postale is seeing fewer clients coming into its branch offices, as people nowadays carry out most of their daily financial transactions remotely, using their smartphones, and are using cash less and less.
Yet thanks to its easy accessibility, its strong foothold in underprivileged suburban neighbourhoods, ...
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Can we dare make predictions about money?

By Thierry Gaudin
November 2017 - Réalités industrielles
Money is a technique and techniques develop, recasting society in the process. As a result, we need to look at the technical nature of money and its long history, in tandem with societal upheaval. Assuming that money is based on trust, and that this trust develops, this paper attempts, by using examples from this long history, to present factual material that provides an understanding of the ...
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The banknote's future

By Gilles Vaysset
November 2017 - Réalités industrielles
Despite the steady increase in the number of card payments and the growing spread of innovative electronic payment solutions (such as contactless, mobile and instant payments), the circulation of paper money continues to rise in most developed countries.
This only seems like a paradox, for numerous studies and estimates show that the proportion of banknotes held for ...
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Who are the stakeholders
in the instant payment revolution?

By Jean-Marie Vallée
November 2017 - Réalités industrielles
November 2017 marked the rollout of instant payment. Using instant payment, sums (initially capped at €15,000) can be immediately transferred to and from accounts. The money will be available in the beneficiary’s account in less than ten seconds, and payments can be made 24 hours a day, seven days a week, every day of the year.
...
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Will instant payment replace cash?

By Rémi Steiner
November 2017 - Réalités industrielles
Payment services in the United Kingdom have undergone a thoroughgoing change. British consumers and firms were resigned to antiquated, second-rate payment services, and to waiting at least three days for a payment to be executed. Over the past decade, they have become accustomed to nearly instant bank transfers and to a burgeoning offer of new services. ...
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How the Riksbank encourages innovation in the retail payments market

By Cecilia Skingsley
November 2017 - Réalités industrielles
Sweden is a low cash society on the verge of becoming a very, very low cash society. Decreasing cash usage is, of course, mirrored in increasing use of electronic payments. The Swedish Central Bank managed to construct a scheme where the fast payments are backed by central bank money. Today, over half of the Swedish population have downloaded the fast payments app (Swish) on their smart ...
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Several legal and historical perspectives
for prohibiting cash payments

By Myriam Roussille
November 2017 - Réalités industrielles
Is this the end of cash in France? Only the future will tell us but, for now, one thing is certain: the French have never made wide use of cash to pay their bills. This is not simply due to their dislike of coins and notes but also, and perhaps above all, to the French authorities’ use of regulations to steer payment habits for several decades now.
...
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Digital Base Money: a few considerations
from a central bank’s perspective

By Yves Mersch
November 2017 - Réalités industrielles
There are many ways to design Digital Base Money (DBM) for non-banks. The different options have potential impacts – both positive and negative – that need to be studied and considered carefully. Only when the best way of designing DBM has been identified, can a decision be made as to whether DBM of non-banks should be introduced at all.
...
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Making in-store payment enjoyable by adopting mobile payment

By Gwarlann De Kerviler and Nathalie T. M. Demoulin
November 2017 - Réalités industrielles
The increasing penetration rate of smartphones changes behaviors based on mobile unique features. Our research provides a first attempt to better understand the adoption of in-store smartphone usage to enhance a brick-and-mortar experience. More particularly, it focuses on proximity mobile payment (p-m-payment), which corresponds to a recent tendency of shoppers to finalize...
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New payment instruments,
avatars of fiduciary money:
New risk factors for AML/CFT

By Bruno Dalles
November 2017 - Réalités industrielles
The accelerating digital revolution and the development of new payment instruments represent a major challenge for anti-money laundering and combating the financing of terrorism (AML/CFT). Some of these instruments are definitely risky.
In 2016, due to the terrorist threat, French lawmakers restricted the use of electronic money, especially prepaid cards. ....
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Are digital currencies disruptive for central banks?

By Laurent Clerc
November 2017 - Réalités industrielles
Digital currencies represent a small proportion of transactions and are currently not a danger for monetary policy or financial stability. Nevertheless, they are experiencing a spectacular rise. Combining a new form of currency and a new payment system, these digital currencies could, in the near future, be “disruptive” for the banking system and for central banks. ...
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Pieces of a monetary history:
reality and appearances in French specificities

By Patrice Baubeau
November 2017 - Réalités industrielles
You usually have to use an implicit or explicit standard, such as a model or average of observed cases, to pinpoint specific characteristics. For money, the standard is so prevalent that it sometime flags up characteristics, that are ultimately fairly normal, as being specificities. These characteristics do however provide an unconventional view of monetary issues. ...
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Towards a world without banks?

By Hugues Le Bret
November 2017 - Réalités industrielles
Banks are powerful institutions – the amounts recorded on their balance sheets often exceed the GDP of the country in which they are established, their customer bases are stable and they enjoy significant revenues. They were able to adapt to the Internet revolution of the 2000s. The current digital revolution is much more thoroughgoing because it affects how the entire population...
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The UN’s Sustainable Development Goals
(SDGs) and the financial sector:
CDC’s experience

By Maria Scolan
October 2017 - Responsabilité & Environnement
The UN’s Sustainable Development Goals (SDGs) provide a universal approach to what Caisse des Dépôts (CDC) refers to, in the French tradition, as the “public interest”. This framework adopted by the international community provides CDC, as a public financial institution, with an opportunity to develop its own evaluative culture of its socio-economic impact. CDC’s role also entails ...
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Luxembourg Green Exchange:
the meeting place
for ESG-conscious issuers and investors

By Chiara Caprioli
October 2017 - Responsabilité & Environnement
In September 2016, the Luxembourg Stock Exchange (LuxSE) launched a unique platform entirely dedicated to green bonds. It is called the Luxembourg Green Exchange (LGX). Such was the success of LGX that, following a strong market push, in May 2017, the platform expanded to also include bonds that finance social and sustainable projects. It has the potential to rewrite ...
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The rise of green bonds:
potential prospects and limitations

By Arnaud Berger
October 2017 - Responsabilité & Environnement
Since 2009, the issue of climate change has fuelled a global economic competition focused on the green energy markets. So-called “green” bonds, issued to finance projects with a positive effect on the climate and on the broader environment, have become emblematic of this new green energy market, which is impacting all energy-dependent economic sectors, led...
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Distributed ledger technology: What impact on the financial infrastructure?

By Alexis Collomb, Klara Sok & Lucas Léger
August 2017 - Réalités industrielles
There has been much talk about how distributed ledger technology (DLT), in particular blockchains, will transform the financial infrastructure. Why has the financial sector been prudently enthusiastic about this new technology? By focusing on payment systems and the market infrastructure, light is shed on the problems of adopting DLT and the hesitations about doing, in particular ...
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Blockchains, a lever of digitization
for investment banks

By Éric Rossignol & Xavier Laurent
August 2017 - Réalités industrielles
Trust is the driving force in blockchain technology. Investment banks are designing many prototypes using this technology because their business heavily depends on the trust they bring to relations with customers. Till now, investment banks have seen this new technology as an opportunity for curbing costs and delivering a better service to customers rather than as a threat...
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Blockchains, the Bank of France
and the ACPR
By Nathalie Beaudemoulin
Didier Warzee & Thierry Bedoin
August 2017 - Réalités industrielles
The ACPR (Autorité de Contrôle Prudentiel et de Résolution), which oversees the banking and the insurance industry, and the French central bank are coming to grips with the technological revolution under way in financial services. Blockchains are among the techniques that can modify, or even optimize, the processing and delivery of financial transactions. However this not-yet-mature ...
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The Icelandic financial crisis
and self-fulfilling prophecies:
Chronicles of a prophesied bankruptcy
(2006-2008)

By François Valérian
August 2016 - Réalités Industrielles
The meltdown of the three major Icelandic banks in the autumn of 2008 has been set down to phenomena as varied as: bloated assets in financial statements, “adventuresome” deregulation, inadequate supervision, the banks' poor governance, weak ethics, a macroeconomic disequilibrium and the lack of international cooperation. As a review of more than a hundred reports, ....
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The rochette affair (1908-1914):
accounting and a financial scandal

By Oussama Ouriemmi and Marie-Claire Loison
March 2016 - Gérer & Comprendre
The disclosure of a fraud orchestrated by Henri Rochette, one of the most powerful financiers in Paris, started a scandal. Rochette, once arrested, immediately reversed accusations and claimed that his enemies had hatched a plot. After investigations established that his arrest was arbitrary, the financial scandal became political and legal. The part of accounting ...
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This project was designed in cooperation with the LabEx Refi (LabEx Financial Regulation)
The majority of the articles published here were translated from French to English by the Translation Centre of the French economy and finance ministries.
The remaining articles were translated by Noal Mellott.


Mise à jour le 26 Novembre 2021


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