Transcript General Presentation Meeting with RSA representatives

Financing municipalities and sub-national governments
The role of Specialized Local Funds and Financial Intermediaries
Conference organized by IADF and GDA
Washington September 30th/October 1st
Dexia Credit Local…
Steps from a public financial institution towards a private
specialized bank
Marie-Alice Lallemand Flucher
Senior Vice President
Dexia Credit Local
In France, a fifty year period of
infrastructure needs,
fund flows
decentralization process…
 has lead to the transformation of the
financial institution
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I / The reconstruction period after World War II
• Weak competencies and means of local governments
• Urgent needs for improvements or creation of basic services
Local infrastructure are financed on subsidized bases
- a large amount of state grants
- loans directly channeled by the Ministry of Finance
 Low rate and long term additional loans from a public financial
institution, the Caisse des Dépôts et Consignations (CDC), funded
by the tax exempt savings of the French Households
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II / Mid 60’s to mid 70’s
• Pressure of the citizen’s demand for more equipments and
housing
• Competition and scarce budgetary resources to face the
multiple demands
 The CDC is asked by the government to favor tax exempt
savings for public housing.
 CDC creates (in 1966) the Caisse d’Aide à l’Equipement
des Collectivités Locale (CAECL), an alternative public tool
to face local infrastructure needs by raising funds from the
financial market.
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III / Mid 70’s to mid 80’s
• Increasing maturity of local governments which have gained in
institutional autonomy and tax power with the decentralization
reform (1982)
• Banking reform facilitating direct access to local governments
for the saving banks
• Investment funds demand reached a momentum that existing
financial institutions can not face
 The CAECL gives way to Crédit Local de France (CLF), a
public owned bank with private status (1987)
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IV / End of XXth century
• The dynamic of the local sector market attracts commercial
banks, from France and other countries. Crédit Local de France
frees itself privatizing most of its capital.
• After a turmoil period, a few serious financial crisis of over
indebted local governments remind the banking sector the
specificity of the local sector and main commercial banks are
withdrawing.
• The prospect and then the opening of the Euro market are
nonetheless boosting international transactions within the local
sector of Euro zone countries.
 In order to face up to things, Crédit Local de France enters into
an alliance with its Belgian counterpart, Crédit Communal, and
becomes Dexia (1996).
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V / From now on… (1)
In order to answer to the increasing complexity of local
demands and to keep its leader position on a more and more
competitive market, Dexia endeavors to :
- maintain its high level of credit worthiness
Its high rating allows the bank to raise funds under the best
conditions (Dexia Crédit Local – Aa2, AA, AA+; Dexia
Municipal Agency – Aaa, AAA, AAA) and to be a major player
in credit enhancement in the USA (Financial Security
Assurance Aaa, AAA, AAA)
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V / From now on… (2)
…Dexia endeavors to…
- to provide a very large range of products and service
. Financing the needs of public sector by direct loans, credit
commitments and the acquisition of securities issued by clients
. Offering value added financial advisory, asset management,
debt management, insurance
. Structuring project finance
. Credit enhancing of municipal bonds
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V / From now on… (3)
In order to better serve local needs,
Dexia has expanded its activities in other countries;
 it endeavors to work at the closest of its clients
dealing with local governments via its local offices.
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Dexia offices
France
Belgique
Luxembourg
Pays-Bas
Grande-Bretagne
Suède
Allemagne
Irlande
Slovaquie
PKB (78%)
Suisse
Etats-Unis
FSA (100%)
ASTRIS
Autriche, Pologne *, &
République Tchèque *
Kommunalkredit (49%)
Portugal*
Espagne
Dexia Sabadell Banco Local (60%)
Australie *
Afrique du Sud
Inca (4.5%)
Italie
Israël
Dexia Crediop (70%) OSM (66%)
*Representation offices
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To conclude…
Dexia’s success story results from its progressive transformation
following the evolution of its potential clients
Passing from a totally public fund status to a fully private bank
meant that the local governments could then afford such a
development, also allowed by the legal framework.
The bank’s viability relies on its capacity to fit the local market
credit worthiness.
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Contact…
Communication Department
Dexia Crédit Local
7-11 Quai André Citroën
75901 Paris cedex 15
Tel.: 33/ 1 43 92 76 50
Fax.: 33/ 1 43 92 75 53
http://www.dexia.com
http://www.almwla.org
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