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| Headquarters | Paris, France |
|---|---|
| Established | 18 January 1800; 226 years ago (1800-01-18) |
| Ownership | 100% owned byFrench Government[1] |
| Governor | François Villeroy de Galhau |
| Central bank of | France |
| Website | banque-france.fr/en |
TheBank of France (French:Banque de France[bɑ̃kdəfʁɑ̃s]) is thenational central bank forFrance within theEurosystem. It was the Frenchcentral bank between 1800 and 1998, issuing theFrench franc. It does not translate its name to English, and thus calls itselfBanque de France in all English communications.
The Bank of France was originally established byNapoleon Bonaparte as a private-sector corporation with unique public status. It was granted note-issuance monopoly inParis in 1803 and in the entire country in 1848. Long independent from direct political interference, it was brought under government control in 1936 and eventually nationalized in 1945. While otherbanks of issue were established in theFrench colonial empire, the Bank of France remainedMetropolitan France's solemonetary authority until France's adoption of theeuro as its currency. As of 2025, its balance sheet total was $1.818 trillion, making it the 5th largest central bank in the world.[2]
The Bank of France long held high prestige as an anchor of financial stability, especially before the monetary turmoil that followedWorld War I. In 1907, Italian economist and statesmanLuigi Luzzatti referred to the Bank of France as "the centre of the world's monetary power."[3]: 21
The French framework forbanking supervision was initiated by theVichy Government in 1941 and entrusted from the start to a separate body under the aegis of the Bank of France, which in 2013 became thePrudential Supervision and Resolution Authority (French acronym ACPR). In 2017 the ACPR lost its prior status as an independent administrative authority under French law, but retains a distinct governance framework that also involves the French government. The Bank of France is not itself afinancial supervisory authority, but overseespayment systems and participates inEuropean banking supervision as a member of theSupervisory Board of the European Central Bank alongside the ACPR.[4] It is also a member of theEuropean Systemic Risk Board (ESRB).[5]
TheKingdom of France's first experiment with a central bank was theBanque Générale (Banque Générale Privée or "General Private Bank"), set up byJohn Law at the behest of theDuke of Orléans after the death ofLouis XIV. Law received the bank's 20-yearcharter in May 1716 and itsstock consisted of 1,200shares valued at 5,000livres apiece.[6] It was meant to stimulate France's stagnant economy and pay down its staggeringnational debt acquired from Louis XIV's wars, including theWar of the Spanish Succession. It wasnationalized in December 1718 at Law's request and formally renamed theBanque Royale a month later.[7] It saw great initial success, increasing industry 60% in two years, but Law's mercantilist policies saw him seek to establish large monopolies, leading to theMississippi bubble. The bubble ultimately burst in afinancial crisis in 1720, and on 27 November of that year, theBanque Royale officially closed.[8]
The collapse of the Mississippi Company and the Banque Royale tarnished the wordbanque ("bank") so much that France abandoned central banking for almost a century, possibly precipitatingLouis XVI's economic crisis and theFrench Revolution. Successors such as theCaisse d'Escompte (from 1776 to 1793) andCaisse d'escompte du commerce (from 1797 to 1803) used the word "caisse" instead, untilNapoleon retook the term withla Banque de France ("Bank of France") in 1800.
In 1803, financial power in France was in the hands of fifteen members of theHaute Banque, when the shareholders' meeting ratified the appointment of a “Council of Regency” composed ofJean-Frédéric Perregaux,Guillaume Mallet [fr],Jean-Barthélemy Le Couteulx de Canteleu,Joseph Hugues-Lagarde [fr],Jacques-Rose Récamier,Jean-Pierre Germain [fr],Carié-Bézard [fr],Pierre-Léon Basterrèche [fr],Jean-Auguste Sévène [fr],Alexandre Barrillon [fr],Georges-Antoine Ricard [fr],Georges-Victor Demautort [fr],Claude Perier,Pierre-Nicolas Perrée-Duhamel [fr],Jacques-Florent Robillard [fr], andJean-Conrad Hottinguer. These powerful bankers, representative of the financial elite that would become referred to in France as theHaute banque, were deeply involved in the agitations leading up to theFrench Revolution.[citation needed] When the revolutionary violence got out of hand, they orchestrated the rise ofNapoleon Bonaparte, whom they regarded as the restorer of order. As a reward for their support, Napoleon, in 1800, gave the bankers a monopoly over French finance by giving them control of the new Bank of France (Banque de France).[9] BankerClaude Perier drafted the first statutes andEmmanuel Crétet was the firstgovernor of the Bank.
On 24Germinal, year XI (14 April 1803), the new Bank received its first official charter granting it the exclusive right to issue paper money in Paris for fifteen years.[10]
On 22 April 1806, a new law replaced the Central Committee with a Governor and two Deputy Governors. All three were appointed by the Emperor.[10] On 16 January 1808, a decree set out the "Basic Statutes", which were to govern the Bank's operations until 1936.[10]
For the first fifteen years, the Bank of France was the sole issuer ofbank notes in Paris, and this privilege was extended to other financially important cities and the rest of the country by 1848.[11]
The Bank was also instrumental in the creation of theLatin Monetary Union (LMU) in 1865. The countries of France,Belgium,Italy, and theSwiss Confederation established the LMU franc as a common bimetallic currency.
In World War I, the Bank sold short-termTreasury bonds abroad to help pay for wartime expenditures. France abandoned the gold standard shortly after the outbreak of war. Debts amounted to approximately 42 billion francs by 1919. Following the war, the Bank sought to re-establish thegold standard and acquired capital from a number of American and British banking syndicates to defend the franc from exchange-rate fluctuations. The Bank also began to hoard gold reserves and, at its peak, held 28.3 percent of the world's gold stock (only behind the United States at 30.4 percent). Some scholars have asserted that this gold accumulation was a contributing factor to theGreat Depression.[12][13][14] UnderÉmile Moreau,Governor from 1926 to 1930, the Bank consolidated gold reserves created a stabilization insurance fund (fonds de stabilisation), and tested new monetary policies in the wake of a global depression.
In World War II, the Bank oversaw the transfer of gold reserves overseas, which mainly includedCanada, theUnited States, and theFrench overseas territories. In 1945, the Bank was nationalized byCharles de Gaulle and became a state-owned institution.[15] Existing shareholders received bonds to replace their shares in the company.[citation needed] The Bank's statute was reformed in 1973.[citation needed]
In 1993, the Bank of France was again reformed when it obtained independence from the state. It sought to establish credibility by promising to adhere to the single mandate ofprice stability.Jean-Claude Trichet,Governor from 1993 to 2003, was the final Governor of the Bank until the establishment of theEuropean Central Bank (ECB) in June 1998. Today, the ECB setsmonetary policy and overseesprice stability for all countries in theEurozone, including France.[citation needed]
On 1 June 1998, a new institution was created, theEuropean Central Bank (ECB), charged with steering the single monetary policy for theeuro. The body formed by the ECB, and the national central banks (NCB) of all the member states of theEuropean Union, constitute the European System of Central Banks (ESCB). According to theMaastrict Treaty, the Bank would oversee the functioning of the payment system and conduct independent research on the French economy, while the newly establishedEuropean Central Bank conducted monetary policy for the entireEurozone. TheFrench franc was replaced by theEuro as a virtual currency on 1 January 1999, being replaced entirely with coins and banknotes on 1 March 2002.
Following theGreat Recession, the Bank of France implementedquantitative easing for the account of the ECB.[16]
In 2010, the French government'sAutorité de la concurrence (the department in charge of regulating competition) fined eleven banks, including Bank of France, the sum of €384,900,000 forcolluding to charge unjustified fees on check processing, especially for extra fees charged during the transition from paper check transfer to "Exchanges Check-Image" electronic transfer.[17][18]
The Bank recently established a "Lab", located on theRue Réaumur in Paris, where start-ups and small businesses work onblockchain,artificial intelligence, andvirtual reality.[citation needed] The Bank is the first to set up a blockchain system.[citation needed]
With the onset of theCOVID-19 pandemic and the ensuing economic crisis, theEurosystem resolved to inject €3 trillion of liquidity into banks, allowing them in turn to support households and businesses, particularly with regard to urgent cash flow needs.[19] In addition to membership in the Eurosystem, the Banque de France is in charge of credit mediation.[20] This service, which has been in very high demand during the crisis, provides assistance to companies facing difficulties in their relations with financial institutions. The Banque de France manages procedures to resolve overindebtedness, and while its premises are no longer open to the public, requests continue to be processed.[19]
The Bank of France describes itself as responsible for three missions: monetary strategy, financial stability, and services to the economy.[21][22]
The Bank of France contributes to the design of the monetary policy of theEurozone, through macroeconomic research and forecast and by taking part in the deliberations onECB decisions, and implements it in France. It printseuro bank notes, in larger volumes than any of itsEurosystem peers, and manages the circulation of bank notes and coins. It also participates in the fight againstcounterfeit money, by training bank employees, merchants, police, and other stakeholders. It manages part of theforeign exchange reserves of the ECB.
The Bank of France participates in the prudential oversight of the Frenchfinancial sector through thePrudential Supervision and Resolution Authority (ACPR) which operates under its aegis.
The Banque de France also has special responsibilities with regard topayment systems andfinancial market infrastructures. It has direct oversight responsibility overLCH SA, acentral counterparty (CCP);Euroclear France andID2S, twocentral securities depositories; and CORE(FR) and SEPA.EU, two retail payment systems operated bySTET SA.[23]: 320 It is also involved in the cooperative oversight of ten infrastructures for which the lead oversight role belongs to another institution:[23]: 321
Like many other central banks, the Bank of France publishes a periodical Financial Stability Review (Revue de la Stabilité Financière).
The Bank of France provides services to households, businesses, and the French state:
The governor of the Bank of France is appointed by the president and is, as of 2019,François Villeroy de Galhau[24], since 1 November 2015. He presides over the Bank's General Council, the body responsible for deliberating on all matters relating to non-Eurosystem activities. As of late 2023, the first deputy governor wasDenis Beau [fr] and the second deputy governor wasAgnès Bénassy-Quéré.
In 2019, the main key figures of the Bank of France are as follows:[25]
The Bank distributed dividends to the French state of 4.5 billion euros in 2016, 5.0 billion euros in 2017 and 6.1 billion euros in 2019.
A decree on 6 March 1808 authorized the Bank to purchase the former mansion of the Count of Toulouse in the rue de la Vrillière in Paris for its headquarters.[10] The bank's head office subsequently expanded from that original property, through the acquisition and remodeling of adjacent buildings and in the surrounding neighborhood. A major expansion occurred in 1924-1927 as part of an urban renewal project that entailed the demolition of several historical buildings and the creation of a new thoroughfare, therue du Colonel-Driant [fr]. It entailed the erection of a new complex for the bank above a large underground bunker known as theSouterraine [fr], designed by architectAlphonse Defrasse.
The Bank of France commissioned the erection of branches in many French towns and cities, which are often prominent in the urban landscape.
In 2019, the bank opened its museum, theCité de l'économie et de la monnaie, in a former branch in the 17th arrondissement of Paris. This followed comparable initiatives in Europe such as theMuseum of the National Bank of Belgium (opened 1982), theBank of England Museum (1988), and theBundesbank Money Museum [de] (1999).
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