Although the State, unlike banks, does not take deposits and convert them into loans, the management of liquidity risk is a central concern of its debt issuance and cash management policy.

The purpose of primary issuance policy is to ensure access to the bond market under all circumstances. It is based on the principles of predictability, regularity and transparency.

The aim of cash management is to secure the State’s financial continuity by ensuring that its cash position always enables it to execute expenditure and revenue under the most secure conditions.

The agreement concluded with the Banque de France, the State’s banker, is based on the principles of information, security and neutrality. The rules in place ensure that the State’s account balance does not decline after 4.15 p.m. due to the belated posting of urgent transactions.

In order to improve the predictability of financial flows posted to the Treasury account, AFT has introduced a notification requirement for any financial transaction in excess of €1 million.

The State adjusts its issues of BTFs (Treasury notes with a maturity between a few weeks and one year, though they may also be issued with a maturity of a few days if necessary) in order to absorb lags between revenues and expenditure within the year and to fine-tune Treasury account management. In support of its investment policy, it uses instruments that are highly liquid (very short-term unsecured deposits) or extremely secure (reverse repos with cash delivery against State securities that are also the subject of margin calls).

The State has also concluded agreements with several foreign countries under which it can negotiate bilateral cash loans and borrowings.

It has concluded lines of credit with several financial institutions that it can draw down at a maximum 24 hours’ notice.

Internal limits to control settlement risk have also been set.