Banks Not Business to Gain From French Bond Plans: Euro Credit

Bank of France Governor Christian Noyer’s plan for packaging business loans into bonds to boost financing for small- and medium-sized enterprises will begin this month. The real beneficiaries will be the banks.

The program will allow lenders including BNP Paribas SA and Societe Generale SA to turn into cash the 362 billion euros ($499 billion) of business loans they’ve already made that are sitting on their balance sheets. They’ll do it by bundling the debt into securities and pledging them as collateral at the European Central Bank or in the interbank market.