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The toxic loan support fund: An alternative to litigation?
[Le fonds de sortie des emprunts toxiques : une alternative au contentieux ?]

Author

Listed:
  • Maxime Fajeau

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Samuel Ligonnière

    (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alexandre Mayol

    (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Faced with the municipal toxic loans crisis, the French state has created a support fund conditioned on local governments abandoning the legal proceedings against these structured credits. This article econometrically studies the State's strategy by retrieving the factors explaining the fund's assistance to the municipalities. The overhead ratio of these toxic loans stands out as the main factor in granting the funds' aid, ahead of the municipalities' financial situation. This indicator was used as a basis for the legal authorities to rule in favor of the municipalities. The fact that it predicts the fund's support reflects the State's strategy to limit litigation opportunity. This contribution thus discusses the strategic choices for settling the crisi

Suggested Citation

  • Maxime Fajeau & Samuel Ligonnière & Alexandre Mayol, 2022. "The toxic loan support fund: An alternative to litigation? [Le fonds de sortie des emprunts toxiques : une alternative au contentieux ?]," Post-Print hal-03700889, HAL.
    • Handle: RePEc:hal:journl:hal-03700889
    DOI: 10.3917/redp.322.0313
    as

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