Gérard Rameix, 57, the former secretary general of France’s financial standards agency (the AMF) has taken over as the new médiateur du crédit. Appointing him, Economy Minister Christine Lagarde said she was happy that “having been the stock exchange gendarme you are now going to be the loans Zorro.”
The médiateur du crédit role (launched October 2008) was meant to last a year - has it been extended?
Yes, there was an agreement between the state and the French banking Federation to extend it to the end of next year.
It must be a success then?
I think so. The figures show a lot of activity and a good success rate. In about two-thirds of the dossiers we accept we are able to resolve matters for the applicant - either their initial request is granted or a new agreement is reached with the bank, a bit different from what they were looking for originally, but a viable solution for the business. About 20% of applications to us are not accepted because they do not meet the criteria or are incomplete or they are recycling a previous application.
Why did you want this job?
Because it is very interesting in terms of the economy and I think we can help to save businesses and jobs, so it’s motivating.
The CGPME [small and medium-sized businesses body] say small businesses are still suffering financially due to the economic crisis and it could get worse. What proportion are seeking help?
Nearly all applicants are small and medium-sized businesses. We have had 18,000 applications and there are a lot more small businesses than that - they don’t all apply, fortunately. There are a million sole traders alone [where the firm is in one person’s name, not necessarily without staff].
How are you able to help unblock situations where a bank was previously refusing to give a loan?
You have to distinguish the departmental and regional level, where we work in partnership with the Banque de France, from the national one. In Paris there are about 30 of us and my predessesor René Ricol estimated the Banque de France had allocated about 200 people to do the job in the regions. The bank has a huge network and understands businesses very well.
Most applications are dealt with by the Banque de France in liaison with us. I have had a meeting with the bank’s regional directors, to whom we delegate mediator powers, to see how they are organising things.
The bigger applications or ones that the regions can’t resolve, we take up directly in Paris.
Why do we succeed in a fair number of cases? It’s by persuasion, studying the case, by negotiating with the business person themselves to ask them to give the bank a few more guarantees... We manage quite often to show the bank that the person should not have been turned down, that they have a good chance of success. People apply to the mediator by internet and we share out the applications as appropriate.
Do you plan to make any changes to the service?
I have a very good impression from meeting the Paris team, who are very motivated. I want to increase the trips René Ricol and his team were making around France. I will make several before Christmas. Then I will see if there are changes to be made. However I think Mr Ricol did a very good job and so my first priority is to make sure we keep that up.
President Sarkozy has announced two billion euros to help small businesses [and the mediator is to allocate some of it]. Will this benefit all sizes of business?
The two billion is divided into different envelopes. There is e200 million for a fund for business development, which will be for businesses that have applied to us and which we think could make good use of a long-term capital investment.
Then there is €300 million in convertible bonds [that can be converted into shares in the issuing body, or equivalent cash] - in this case the businesses will have to put in a minority stake of €5 million or more, so we are mainly talking about medium-sized businesses worth about €50 million plus, that’s not suited to sole traders.
There will be several hundred million for the Fonds Stratégique d'Investissement [a fund created by the government last year to help business] and several hundred million for Oséo’s [a public body helping businesses grow and innovate] investments. One part of the package that will suit the smallest businesses is specialised investment funds from [public finance body] the Caisse des Dépôts.
For our readers who have businesses, how can they make successful applications to benefit?
Think ahead, look at your accounts and think about whether the needs for working capital, for equity capital, will be covered in the long-term - if not don’t hesitate to apply to the mediator or Oséo. Applications are totally confidential and there is no risk of leaks. The sooner we get your application, the sooner we might find a solution.
You worked on some sensitive matters at financial regulator AMF, like the EADS insider-dealing affair, Société Générale rogue trader Jérôme Kerviel and fraudster Bernard Madoff... does that stand you in good stead for this?
The work I am doing now is a bit different, but my experience means I am used to dialogue with big financial establishments - I can pick up the phone and call people at the top in banks, which will be useful. It also gave me a lot of economic and financial experience.
At the AMF did you put in place any changes to try to stop scandals like these happening again?
I made a great effort on the legal side to make the punishment regime incontestable so we could make sure there were concrete follow-ups to our inquiries. I also tried hard for us to have policies and to take positions that were predictable and clear for the market. Previously some people accused us of just taking decisions case by case. We had an operation called [using the English term] “Better Regulation,” that aimed at documenting our positions better and making them public.
You were quoted saying half a billion in French funds might be under threat in the Madoff case. Is that turning out to be true?
Yes, unfortunately. It shocked some people at time because it was a lot of money and people were worried, but it was true. I hope that they will be able to recuperate part of it.
There are some quite well-off French people and there are banks specialising in wealth management that had used investments that were marketed in Europe but in reality were run by Madoff.
What are your predictions for the year to come?
I think things will improve but quite slowly. There is a little upturn at the moment but I think we will see a relatively stable period, taking stock of everything that has happened. Most serious economists think it will be what cyclists call a false flat [where the road appears to be flat but is on a slight gradient].
Apply to the mediator at www.mediateurducredit.fr or for more details call 08 10 00 12 10 (French, local call cost). The UK is looking at setting up its own “Financial Intermediary Service” after being inspired by France, the mediator’s office reports. The UK studied at what was being done elsewhere after small businesses asked for more help in getting loans.
