What accounts for France’s anomalous household and corporate debt ratios?

Household and corporate debt ratios continue to rise in France, whereas they are falling in the other euro-zone countries. Why? With respect to households, it may be because real estate prices have risen faster, housing purchases have risen faster or banks’ lending beh aviour is more aggressive. We find that all these factors are at play; With respect to companies, it may be because of a need to finance greater investment at a time of low profits, the financing of cash holdings or acquisitions. We find that all these factors are at play. Altogether, the rise in France’s private sector debt ratio can be attributed to both positive factors (high investment, healthy banks) and negative factors (rising real estate prices, financing of cash holdings and acquisitions).