Reuters: Bankruptcy News: French regions get Credit Agricole loans boost

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French regions get Credit Agricole loans boost Jun 26th 2012, 15:59 PARIS, June 26 | Tue Jun 26, 2012 11:59am EDT PARIS, June 26 (Reuters) - Credit Agricole said it would make almost 1.9 billion euros ($2.37 billion) available to French local governments with the help of its insurance arm, which will finance most of the loans through investment funds. The 1.875 billion euros arrangement is the latest sign of how capital-starved banks are looking to do deals with insurers, many of whom are looking for new ways to invest funds after being hit with a massive drop in investment returns since 2008. Many French towns, cities and regional governments have faced tight financing since the near-collapse of Franco-Belgian bank Dexia, which provided the vast majority of municipal loans. Credit Agricole, majority owned by regional co-operative banks, said it tapped its insurance arm because of credit constraints resulting from an international agreement on higher capital standards for banks, known as Basel III. Europe's No.4 lender by assets said the regional banks would originate the loans and retain 20 percent of them. The rest will be sold on to funds which will then sell securities to Credit Agricole Assurances. Rival bank Societe Generale said last month it was teaming up with Europe's No. 2 insurer, AXA, to offer funding to small-to-mid-sized companies. ($1 = 0.8019 euros) (Reporting by Matthieu Protard and Matthias Blamont; Writing by Christian Plumb; Editing by Lionel Laurent and David Hulmes) Link this Share this Digg this Email Reprints

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