Last February, the French government decided to change the formula that fixes the rate of the Livret A. Anything revolving around the Livret A is a hot topic in France as it is a very popular tax-free savings account that impacts directly or indirectly on more than €300 billion of French savings and is a benchmark for the financing of social real estate. In addition, this change in the fixing of the Livret A is to take place by 2009, when all French banks will be allowed to offer Livret A savings accounts to their clients. At this time, only three are able to do so. This new formula and liberalisation process could have strong implications on the French inflation market and beyond. It could also create favourable conditions for attractive inflation structured products.
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