French financial national accounts for 2008: non-financial agents' debt ratios still rising

Franck Sédillot, Banque de France

The economic downturn and financial tensions significantly affected the investment and financing behaviour of French non-financial agents in 2008. Households opted for liquid, low-risk instruments. The contraction of inflows into life-insurance products gained momentum. Non-financial corporations, as well, showed a greater propensity to invest their cash holdings in safer, more liquid assets. Households and businesses continued to borrow, but at a visibly slower pace, particularly in the second half of the year. Their debt ratios started to rise again, with debt outpacing income. To finance investment, non-financial corporations are relying less on bank loans and issuing larger amounts of debt securities. By contrast, they are cutting back on equity issues. Amid heightened uncertainty over financial markets and heavy stock-market correction, non-money-market unit trusts (mutual funds) are experiencing sizeable net outflows.

Insee Première
No 1239
Paru le : 20/05/2009