By William Horobin
PARIS--The French government Wednesday signed off on the
creation of a new bank to fill the funding gap for municipalities
and hospitals left by the retreat of Franco-Belgian lender Dexia SA
(DEXB.BT).
The new entity is called the Societe de Financement Local, of
SFIL, and will issue around 5 billion euros ($6.66 billion) of debt
a year for local authorities and hospitals, the finance ministry
said.
The SFIL will be 75% owned by the French state, 20% owned by the
state's financial institution Caisse des Depots, and 5% owned by La
Banque Postale, the banking arm of the state-owned postal
service.
"We are extremely confident that local authorities will be
financed in 2013, which was the case neither in 2012 nor 2013,"
Chief Executive of La Banque Postale Philippe Wahl said at a press
conference at the finance ministry.
SFIL's will be headed by Philippe Mills, the chief executive of
France's debt issuance agency Agence France Tresor, the finance
ministry said.
Write to William Horobin at william.horobin@dowjones.com