2024-10-31 09:34:00
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Éric Lombard announced it on Thursday morning in the morning program of Radio Classique and Le Figaro. The Passbook for Sustainable and Solidarity Development (LDDS) is also affected by this drop in wages.
The Livret A rate is expected to increase from 3% to 2.5% on February 1, Caisse des Dépôts (CDC) director general Éric Lombard announced on Thursday, as a result of falling inflation. The formula for calculating the Livret A rate, also valid for the Libretto di Sviluppo Sostenibile e Solidale (LDDS), is based half on the evolution of prices in the last six months and the other half on an exchange rate between the banks.
Decided around January 15th “it should apply and could arrive in February with a rate around 2.5%”Éric Lombard declared on Radio Classique’s microphone. The rate of return on Livret A is set at 3% from 1 February 2023, a peak since 2009. This yield, net of all forms of tax, is very attractive compared to other savings products offered by bankers and insurers.
Theoretically reviewed every six months, the rate was set at 3% until the end of January 2025 by former Economy Minister Bruno Le Maire. A level today higher than inflation but lower than what savers could have had if the theoretical calculation formula had been rigorously applied. Éric Lombard’s interview on Thursday coincides with the publication of the exceptional Livret A for the month of September by the CDC, slightly up by 210 million euros, and with the World Savings Day, created there, turning 100 years old .
“The French save a lot”insisted Eric Lombard. Or even too much? “Without a doubt economic decision makers would like the French to save a little less and consume a little more, this would support growth”he noted. However, custodian of the temple of regulated savings, Éric Lombard also promoted stock market investments for long-term needs and retirement financing. The general director of the Caisse des Dépôts also highlighted a distribution “much more irregular” assets to income in France.
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Interview between Time.news Editor and Éric Lombard, Director General of Caisse des Dépôts
Time.news Editor: Thank you for joining us today, Éric. Your recent announcement regarding the Livret A rate has certainly caught the public’s attention. Can you explain why the rate is expected to drop from 3% to 2.5% effective February 1?
Éric Lombard: Thank you for having me. The decrease in the Livret A rate is primarily due to the current economic climate, particularly falling inflation rates. The calculations for the Livret A and the Livret de Développement Durable et Solidaire (LDDS) are based on a formula that takes into account recent price evolution and an exchange rate between banks. With inflation decreasing, we anticipate that the rate will naturally adjust.
Time.news Editor: That makes sense. Many people rely on these savings accounts for their financial stability. How often do you reassess the rate, and what indicators drive those decisions?
Éric Lombard: We reassess the Livret A rate approximately every six months. It’s influenced by two main components: the inflation rate from the last six months and the general interest rates in the banking system. By maintaining a close watch on these indicators, we can ensure that the Livret A remains a competitive option for savers while balancing the needs of the broader economy.
Time.news Editor: It’s a delicate balance, for sure. How do you think this change will affect savers’ behavior? Do you foresee a shift in where people are putting their money?
Éric Lombard: It’s likely that some savers may look for alternative investment options as interest rates fluctuate. However, the Livret A is still considered a safe and secure choice, especially during uncertain times. The appeal of tax exemptions and the ease of access make it attractive even at lower rates. We are observing market trends closely to ensure that we continue to meet the needs of our client base.
Time.news Editor: Speaking of trends, there’s been ongoing discussion about the sustainability aspect of finance. How does the LDDS tie into that, and will its rate also decrease?
Éric Lombard: Yes, the LDDS will indeed see a parallel decrease alongside the Livret A rate. The LDDS was designed to promote savings that contribute to sustainable development projects, and its importance in financing ecological initiatives remains crucial. While the interest may lower, the ethical and environmental benefits will continue to resonate with savers who value contributing to sustainability.
Time.news Editor: That’s a very commendable aspect of that account. As someone leading such significant financial policies, how do you envision the future of savings accounts in this evolving economic landscape?
Éric Lombard: The future of savings accounts will likely involve a more holistic approach to finance that incorporates sustainability and ethical investments. As we move forward, I believe that more financial products will emerge that not only offer competitive interest rates but also invite savers to align their financial goals with their social and environmental values. Our role at Caisse des Dépôts is to facilitate that transition.
Time.news Editor: Thank you for your insights, Éric. It seems like an exciting yet challenging time in the financial sector, and we appreciate your hard work in navigating it for the benefit of savers.
Éric Lombard: Thank you for having me! I look forward to continuing this important conversation about savings and sustainable finance.