Sunday, May 2, 2010

French Savers and Greek Debt

Elie Cohen analyzes French exposure to Greek debt. He believes that the principal channel of influence is via life insurance and annuities, which are favored savings vehicles in France. These instruments are supported by euro-denominated securities, and according to Cohen a substantial amount of this investment is in Greek sovereign bonds.

5 comments:

Kirk said...

FYI, assurance vie is not life insurance; that's assurance decès. Assurance vie is simply a type of savings plan that's defiscalized (well, the interest is defiscalized if you close out the plan or withdraw after eight years).

Unknown said...

Thanks, I didn't know that.

Unknown said...

Hmm, somewhat different info here:
http://fr.wikipedia.org/wiki/Assurance-vie

Kirk said...

Yes, you can convert it into an annuity, but you can also take the money out without paying taxes after eight years. It's not life insurance, in spite of what that says, because there's no payout in case of death, other than what's in the account.

We have several of these accounts, and, as the Wikipedia article says, many people use them as savings for retirement (which is what we do).

MYOS said...

Greece, IMF, and the Socialists, in a very interesting perspective by Mediapart's Mauduit (you can see the gist for free)
http://www.mediapart.fr/journal/france/030510/dsk-sest-il-disqualifie-pour-representer-les-socialistes