As the world’s most traveled tourist destination, France sets the scene for powerful economic impact across the European landscape as well as the world. France boasts the world’s 7th largest economy by nominal gross domestic product and is also the 3rd largest in the European Union (EU), after the United Kingdom and Germany. The French also led the world in economic recovery after the global recession in 2008. The country faced roughly a year of contraction, albeit with some economic staleness, before making a full recovery back to a healthy, growing economy. This article will cover the financial system of France, as well as a range of market information covering currency, futures, and stocks.
In the middle of the French financial system is The Banque de France, which serves as a supporting pillar of the federal system known as the Eurosystem. It was formed by the larger European Central Bank (ECB) to help govern the national central banks of those countries within the Eurozone. The Banque de France defines its role as “monetary strategy, financial stability and the provision of economic services to the community.” In short, France’s central bank is responsible for making the macro economical financial assessments of the ECB’s policy, ensuring quality of banknotes and printing the majority of the notes circulated in the EU, and providing practical services to people in financial distress or emergency.show more
The first stock exchange headquartered in Amsterdam changed the world when it allowed investors to finance enterprises and expeditions. Some years later, the exchange merged with the exchanges in Brussels, Lisbon, and Paris to create the largest merger of its kind. After its merger, and a purchasing deal that followed shortly thereafter, the exchange renamed itself the NYSE Euronext (NYX). The NYX trades equities and derivatives, and posts the CAC 40 Index, also called the Consumer Advisory Council Index. This index is made up of the top 40 French companies although nearly half of these are owned by foreign entities. NYX seeks to offer the most modern and advanced trading platform and services available to traders.
The euro (€) is the official currency of the European Union (EU). Although France joined the EU in 1957, euro banknotes and coins were only introduced in France as the official currency in 2002.
The historical currency of France was known as the French franc, also known as the franc. For the last few hundred years it has undergone little change with the exception of being revalued in 1960. The reissuance of a more highly valued currency in the 1960’s was important to the franc’s value, as each old franc was revalued for 100 francs. These were in fact called the New Franc for some years, until the circulation of its older form had weakened enough that the citizens could say franc without being confused.
When the franc converted to the euro in 2002, the exchange rate was roughly 6 francs per euro. After taking on the European Union’s currency, France’s share of the foreign exchange market became more noticeable. As the major printing center for euro bills, and with the Banque de France operating in such a major capacity, France has certainly seen some benefits from the forex market.
The first franc was a golden coin presented in 1360 to pay the Ransom of King John II of France. This coin secured the king’s freedom and showed him on a richly decorated horse, earning it the name franc à cheval (meaning “free on horse” in French). Despite a long and trying history, the franc remained one of the longest running currencies until France’s adoption of the euro in 2002.
When the first New Franc (F, Fr, FF or FRF) was issued, the Banque de France took the older 500, 1000, 5000, and 10,000 franc notes and reprinted them all with 2 less zeros; thus, 5, 10, 50, and 100 new francs were issued. Properly printed notes were issued soon after, where the denomination was printed with only the new denomination. Coins were also minted in 10, 20, and 50 cent intervals, with coins for 1, 2, and 5 francs being available as well.
Major corporations are traded on two stock exchanges in Europe. The London Exchange and the NYX control virtually all major financial transactions within the equities and futures markets. The top of the NYX list is garnered as the CAC 40, a venerable index of major companies within the services sector, various areas of the industrial sector, and France’s own modest chemical sector; all of which top the list with some various underdogs making their way onto the exchange. The 40 most significant market caps of the top 100 in Europe, make up one of the most daunting indexes in the global market, and its home is the French exchange, NYX.