France Nationalizes Its Second Largest Mortgage Lender

Date Published 9/26/2012
Author Marja Hoek-Smit
Country France

September 26, 2012

The French government suddenly announced the nationalization of troubled mortgage lender Credit Immobilier de France (CIF), which is the country's second largest mortgage specialist. Finance Minister Pierre Moscovici said according to Reuters: "To allow the CIF group to respect its overall commitments, the state decided to respond favorably to its request to grant it a guarantee". The guarantee will be implemented subject to the approval of the European Commission and Parliament. EC approval is required under the State aid procedure. The French government was unsuccessful in finding a buyer for the troubled CIF and with the downgrade of Moody’s by 3 notches earlier in the week, nationalization was all but unavoidable.While CIF has only a small branch network with 300 branches, more than 30 billion euros in loans bear its signature. Its ultimate insolvency would have had serious impacts on the banking system.

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