Livret A: the Banque de France offers a rate of 3%, a first since 2009

Impatiently awaited by tens of millions of savers, the new Livret A rate will be increased from 2% to 3% on February 1, if the Minister of Economy and Finance follows the recommendation of the Governor of the Banque de France, a level unprecedented since 2009 but still well below inflation.

This proposal is the result of a slight downward revision, François Villeroy de Galhau invoking in a press release “exceptional circumstances” to spare the finances of local authorities and social housing.

Without this rounding, the calculation formula taking into account on the one hand inflation – it reached 5.9% in December according to the latest figures from INSEE published on Friday – and on the other hand the interbank rates, at which banks are exchanging short-term money, brought out the rate at 3.3%.

The Governor of the Banque de France François Villeroy de Galhau, on October 26, 2021 in Paris (AFP / Eric PIERMONT)

The confirmation of the Minister of Economy and Finance should intervene as soon as he intervenes in the 1 p.m. newspaper of France 2.

This “already represents a significant increase”, notes the central bank which wishes “that the rate movements of the livret A remain progressive rather than too volatile, and this upwards as a potentially downward day”.

The Livret A rate, still at its lowest level of 0.5% a year ago, doubled for the first time on February 1, 2022 and then again on August 1, to reach 2%.

– Spare the goat and the cabbage –

The approximately 500 billion euros deposited by the French in the livret A and livret de développement durable et solidaire (LDDS), most of which is centralized by the Caisse des dépôts (CDC), are intended to finance social housing, l social and solidarity economy or even energy savings in housing.

If the increase in the rate is good news for savers, it is therefore less well received by many public players, whose loans from the CDC are often indexed on this rate.

Eric Lombard, Managing Director of Caisse des dépôts, on January 18, 2022 in Versailles (POOL / Ludovic MARIN)

A rate “too high would be very unfavorable” to “financing social housing and city policy”, argues the Banque de France.

The “social housing organizations (…) are in a good financial situation, despite the rise in rates, despite the rise in raw materials, despite the rise in energy”, however pointed out Tuesday the director general of the Caisse des dépôts Eric Lombard before the Finance Committee of the National Assembly.

The rise in the rate is also coldly received by banking establishments which keep part of the deposits of regulated savings in their coffers.

The banks fear that an excessive increase “in the rate of the passbook A will make it very attractive and encourage too many savers to turn away from insurance investments”, says Eric Dor, director of economic studies at the IESEG business school. . Among the returns announced since the beginning of the year by managers of euro life insurance funds, none has so far reached the 3% mark.

– Promoting LEP –

The filling margin is large: the approximately 55 million booklet A, capped at 22,950 euros, were only filled to a quarter of their capacity at the end of 2021, according to the Banque de France.

Ditto for the Popular Savings Book (LEP), reserved for the most modest households. Despite a record number of new LEPs in 2022 – more than two million – the bulk of the 18.6 million eligible people have yet to open one.

The Banque de France claims to “strongly support this instrument”. The governor has also chosen to fully apply the formula for calculating the rate, by proposing to raise it from 4.6% to 6.1%, a level not seen for more than 35 years.

The money deposited in the LEP, capped at 7,700 euros, is, as with other regulated savings products, guaranteed by the State and exempt from taxes and social security contributions.

Only taxpayers who do not declare more than 21,393 euros for a single person, low-income households who often struggle to save are eligible.