France Plans $23 Billion State-backed Scheme to Avert Company Failures

France plans to raise 20 billion euros ($23 billion) in quasi-equity loans for small firms hit by the coronavirus crisis by offering investors a state guarantee against the first 2 billion euros in losses, officials said, Reuters reported. Fearing failures among firms which were already saddled with record levels of debt before the crisis, the French government wants the programme up and running by early next year as it battles the economic impact of the COVID-19 pandemic. Under plans to be presented to the financial sector on Monday, banks would first lend to small and mid-sized firms and then sell on 90% of the loans to institutional investors, people familiar with the proposals told Reuters. That would limit banks’ risk exposure to 10% of the loans, while also steering funds to viable firms. Read more