Competition among banks in France and the fixing of their rates

Abstract

The work describes the developments and changing forms assumed by the competition among French banks during the last thirty years, from the first voluntary limitations of certain rates adopted in 1925 to the rigid and strict regulation of banking tariffs introduced by the legislation of 1941, to the “illegal” but tolerated regime of competitive freedom which prevailed in postwar years and which, contrary to what happened in Italy, has not yet been made subject to new regulations. According to the author, the French banks have again been led to extend competition from the field of quality of services to the traditional and long-since cartelised field of prices , and hence to engage in a struggle on credit rates beyond the old technical limits, in order to force the flow of funds and escape the rigours of the French rediscount policy. Moreover, the competition on deposit rates has assumed such dangerous forms that in France the speedy adoption of new regulations has also become a matter for serious discussion.