Article R312-18 of the Monetary and Financial Code

Extract

[...] The contribution of Article R312-18 of the Monetary and Financial Code Article R312-18 of the Monetary and Financial Code apportes des clarifications on the point of knowing whether the issuance of debt securities by a credit institution is or is not the receipt of funds from the public. However, the the question is not treated under the angle of the banking monopoly. In fact, any commercial company can issue debt securities. It is mainly a matter of to determine whether the deposit guarantee has a vocation to apply in the event of subscription by an investor of a bond title with a bank. [...]

[...] In fact, a depositor is completely indifferent to the idea of knowing what form the 50 euros will take that he has integrated into his bank account as long as he is able to recover them. Money is of the same nature as any thing, although in legal relationships, there is indifference to the materiality of the good. Since the Middle Ages, on a considered that the deposit of a fungible thing authorized the depository to dispose of it. The bank could thus transpose a part of the deposits to have the money. This is what is called the banking transformation. [...]

[...] The code monetary and financial establishes in this case an exception to the banking monopoly in terms of receiving funds from the public in as much as the opening and management of a partner's current account is akin to such an activity. In fact, companies retain liquidity received from third parties. The partner's current account is also the subject of an exception to the banking monopoly in terms of usual remunerated loans, opened by the code monetary and financial. - The funds that companies receive from their employees, provided that the amounts paid do not exceed 10% of the company's own capital. This type of practice is notably found in cooperative societies. [...]

[...] Article R312-18 of the Monetary and Financial Code considers that a a credit institution that issues debt securities in any form receives funds from the public. On therefore assimilates them to funds redeemable by the public the debt raised by a banking institution through debt securities. For such an assimilation to be carried out, a certain number of conditions must be met : - The subscriptions resulting from the issuance of debt securities are not nor constitutive of public funds receipt when the aforementioned securities are subordinated (article R312-18, 1°, of the Monetary and Financial Code) A subordinated debt security has the following characteristic: the issuance contract stipulates that its holder will only be repaid after the complete satisfaction of all other creditors, even those with unsecured claims. [...]

[...] However, the use of the adverb « notably leaves one to guess that the reception of public funds can take on other legal figures that the only deposit. The mandate, the trust, the pledge or even the mortgage also allow receiving refundable funds from the public. In this case, the funds received from the public are included in the accounts opened by the bank. c. The bank's right to dispose of deposited funds The The bank has the right to freely dispose of the funds thus collected from third parties. [...]