France to set up state-backed investment bank

Associated Press SHARE

PARIS (AP) — France is creating a new government-backed investment bank that will aim to spur economic growth by lending to small and medium-sized enterprises.

Jean-Pierre Jouyet, the head of French state-owned financial institution CDC, has been named chairman of the new investment bank, known by its French intials BPI.

Prime Minister Jean-Marc Ayrault said Wednesday the bank will marshal €30 billion ($39 billion), largely from existing sources, to finance loans, investments and guarantees.

The BPI, to be owned 50-50 by the government and the CDC, will regroup under one roof existing agencies and funds with the aim of better coordinating their activity.

Opponents warn the plan, which had been a campaign promise of President Francois Hollande, brings no new money to the table and may create conflicts of interest and political interference.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.