Wednesday, November 9, 2016

The winners and losers of the reform of the rate of remuneration Booklet A – The Echoes

It is now official. In a press release, the minister of Finance, Michel Sapin, has confirmed on Wednesday the overhaul of the formula for calculating the rate of the Booklet Has a symbol of people’s savings. Approved by the advisory Committee on legislation and financial regulation, it shall enter into force in the next few days by order of the minister.

Currently, the Booklet Is guarantee to investors pay a minimum of greater than 0.25% to the rate of inflation. Tomorrow, this will not be always the case. In case of deviation of more than 25 basis points between the inflation and currency rates, a new rule applies : the return of the booklet will be equal to the average level of inflation observed during the six months preceding the revision of the rate. The measure is meant to be “ temporary “, and reserved for exceptional market circumstances that are stimulated by the policy of the ECB.

A reform painless short-term

The reform will be painless for investors in the short term, although they may be losers in the longer term. In a first time – and until the next presidential election – this new regime of exception will not be implemented as announced in July, “ the rate of the booklet Has is not going to decrease and will continue to February 1, 2017, 0.75% ” confirmed Michel Sapin. This is good news for investors, as an immediate application of this new formula would fall for their remuneration to be 0.23 %. Never seen since the creation of the investment regulated in 1818 !

On the other hand, from August 2017, this formula of calculation could reduce the rate of Booklet A. of Course, if the forecasts of economists are confirmed, his / her remuneration is expected to increase. “at the end of June 2017, the average inflation rate over six months, is the new reference for the calculation of the rate of the Booklet Has, could reach 1.1 % “, anticipates Cyril Blesson, a partner at PEER Council. But this increase will be contained. The old formula would have enabled us to further enhance the performance of 0.25%.

For the associations of consumers, CLCV, the measure is likely to ” discourage the savings of people in the most precarious “. Second savings product is preferred by the French, the Booklet Is still used daily by some low-income households, as a substitute for the current account . For the Caisse des Dépôts, which mobilises the funds of the Booklet Is to finance of the actors in the social housing, the measure was in any case become essential to ” secure for the future plans of regulated savings “. The public institution is affected by the effect of the growing gap between the remuneration that it pays to the savers and the holder of a Libretto Has and the market rate to which it can place its resources. To the extent that the credit rate that it offers to slot players are not very competitive, as indexed to the rate of Booklet A.

so, this formula less generous is expected to benefit the stakeholders in social housing. Other beneficiaries, the French banks : responsible for paying a portion of the outstanding amount of the Booklet Is, they consider regularly the remuneration of the investment too generous.

the principles of the reform of the rate

in order To limit the sudden variations of the remuneration Booklet A, the indices used to calculate its rate of inflation, excluding tobacco and currency rates) will be smoothed over six months. In order to avoid a divergence too great between the market rate and the remuneration of the investment, its rate will be more plus 0.25% when the difference between the currency rates and inflation exceeds 0.25 per cent.

Sharon Wajsbrot


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