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NEW CHALLENGES

IN THE POST CRISIS ENVIRONMENT

December 2010

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1. Paris EUROPLACE

Post Crisis Strategy

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Lessons Learned from the Financial Crisis

Paris has been resilient in this crisis:

- Efficient Regulation: The Paris financial marketplace has experienced regulators and has maintained excellent dialogue between financial professionals & these regulators throughout the crisis. Additionally, we’ve achieved a good balance between investor protection & attractiveness as a financial center, based on new French and European regulation.

- The French “Global Financial Services” Banking Modelis based on diversification supported by retail banking for the distribution of financial products. During the crisis, French bank assets depreciation totalled €20bn, compared to €35bn in Germany, €180bn in UK and €350bn in US.

- A Strong Asset Management Pool: Paris is no. 2 in the world in assets under management.

- Worldwide Capacities in Education and Research, with a special focus on risk management and financial innovation.

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3 priorities:

• Financial markets regulation.

• Monetary policy.

• Commodity markets.

The G20 French Presidency Roadmap

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1. A prerequisite for any action: Restore confidence in financial markets, which requires: - Strengthening the role of regulated markets and developing more transparentOTC markets in France and throughout Europe;

- Establishing balanced financial regulation in connection with the ongoing reforms at the global level;

- Improving accounting standards.

2. Consolidate a comprehensive range of financial services with more transparent and better adapted instruments in each of these fields:- Asset management; - More transparent derivatives instruments;- Custody services and fund administration; - Insurance.

Paris EUROPLACE 2011-2015

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3. Accelerate SME financing and contribution to financial innovation- SME financing;- Project financing;- Research and financial innovation.

4. Develop long-term savings and increase the contribution of financeto sustainable development

- SRI (socially responsible investments);- Microfinance;- Environmental finance.

5. Develop education and research- Regulation (EIFR)- Risk management; - Research and financial innovation.

6. Attract capital and international talent

Paris EUROPLACE 2011-2015

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International Cooperation

� Global crisis requires global solutions => need for cooperation between financial centers.

� Paris EUROPLACE MoU with international financial centers:� Dubaï;

� Qatar;

� Moscow;

� Almaty – Kazakhstan;

� Shanghai (project);

� Abu Dhabi (project).

� Fostering a fruitful dialog between financial centers.

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2 – Paris Financial MarketsAreas of Excellences

Equity Markets - NYSE EuronextWelcoming International Issuers in Europe

Source: Word Stock Exchange, Feb 2010

NYSE Euronext, the Largest Stock Market in the World

(in terms of market capitalisation)

NYSE Euronext(Listed products in NYSE Euronext Europe)

Equity(Listed companies)

Domesticof which Paris

1 272952

Foreignof which Paris

199111

Total listed companies 1 471

Bonds(number of listed bonds)

Gov. Bondsof which Paris

433237

3 5111 889

Other Bondsof which Paris

Total Bonds 3 944

Structured Products(number of securities)

Year to date 2010of which Paris

14 0787 369

ETF(number of funds)

Year to date 2010of which Paris

517417

NYSE Euronext Europe’s branch lists more than 1,400 companies, of which 200 are foreign (non-European) companies.

NYSEEuronext

T.S.E NASDAQOMX

L.S.E Shanghai SE Hong KongExchange

Source: NYSE Euronext, Q1, 2010

Chinese Companies listed on NYSE Euronext Paris

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Source: Source: World Federation of Exchanges

Equity Markets - NYSE EuronextValue of Equity Trading

(NYSE Euronext Europe’s Branch, in € bn)

12

Strong Development ofFrench Government Debt Market

(Negotiable government debt outstanding)

Fixed Income Markets - Investment Opportunities

0

200

400

600

800

1000

1200

1400

2001

2002

2003

2004

2005

2006

2007

2008

2009

31/0

1/201

0

OAT BTAN BTF

13

United Kingdom27%

Germany10%

Netherlands9%

Others21% France

33%

In % of total international issues

Paris, one of the Worldwide Leader in Terms of Bonds Issue

France is the second position worldwide for International bonds issuance in 2009

France Leads European Corporate Bonds Markets

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67 62 52 69

3379 76 48

98

136

237

395

1998 2000 2005 Dec-09

BMTNs BT (corporates) CDs 'Financial institutions)

Source: Banque de France

French Commercial Paper

outstanding, in € bn

International banks in Paris benefit from the liquidity provided by the ECB

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Growing Commodities Markets

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Growing Commodities Markets

Bluenext : the French Carbon Markets

French Electricity Markets

17Asset Management Industry

18

19

2,4

6,0

8,6

12,5

13.010,5

2003 2004 2005 2007 2008 2009

Growth in French Private Equity Market(in terms of investment, in € billions)

Source : AFIC, EVCA

Investments by Country of Destination in Europe(in terms of % of the total investment)

A Growing Private Equity Market

Netherlands8%

Italy7%

Sweden6%

Spain5%

Others12% UK

35%

France 16%

Germany11%

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New Developing Sectors –Socially Responsible Investments (SRI)

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

0

50

100

150

200

250

Assets (in € bn) Number of funds

SRI in France(in terms of assets and number of funds)

SRI Funds in Europe (in terms % of total European assets)

Others4%

UK20%Belgium

15%

Italy5%

Netherlands6%Germany

6%

Sweden7%

Switzerland14%

France23%

Source: Novethic, 2009

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Project Financing

Public-Private Finance in Europe(2001-2008, in %, Value of Signed Contracts)

France11%

Spain11%

Italy10%Ireland

9%Greece

7%

Germany6%

Other5%

Netherlands5%

Others17%

Source: Public Private Finance, DLA Piper

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3. An Attractive Business environment

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

50,00%

19951995 20052005 20092009

24.9%24.9%

39.8%39.8% 43.0%43.0%

Source: AFT, Banque de France

Foreign Investors Hold 43% of the French Listed Companies

Paris, an Opened International Financial Center

0%

10%

20%

30%

40%

50%

60%

70%

20.0%20.0%

61.0%61.0%

19971997 20092009

Foreign Investors Hold 61% of the French Government Bond

More than 500 foreign banks and financial institutions, making Paris is in number 2 in Europe in terms of foreign participation.

• Fortune Global 500 Index : 17 French companies are in the top 5 worldwide position in their respective industries.

• 40 French companies are among the 500 largest in the world[Germany (39), UK (26)]according to the Fortune Global 500in 2009.

• The importance of French compagnies in Europe is also assessedthrough their weight in the European indexes: �55% of The €uroStoxx 50 �27% of the Stoxx 50.

An International Business CenterFrench financial markets are fuelled by major companies

Top Cities Worldwide in Terms of Presence of International Companies (source: Fortune Global 500, 2009)

Rank City CountryNo. of

Global 500 companies

Revenues($ millions)

1 Tokyo Japan 51 2,237,560

2 Paris France 27 1,399,172

3 Beijing China 26 1,361,407

4 New York U.S. 18 869,15

5 London UK 15 994,772

6 Seoul South Korea 11 519,351

7 Madrid Spain 9 434,393

8 Toronto Canada 7 195,51

8 Zurich Switzerland 7 242,595

8 Osaka Japan 7 291,492

8 Moscow Russia 7 380,53

8 Munich Germany 7 485,386

9 Houston U.S. 6 434,484

10 Mumbai India 5 146,624

10 Atlanta U.S. 5 199,222

10 Amsterdam Netherlands 5 349,068

11 Shanghai China 4 101,056

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12 French Companies are World Leaders in Their Respective Industries

(19 French-listed Companies in the Eurostoxx 50)

Source: Fortune Global 500, 2009

AirlinesBuilding Materials, Glass

Engineering, Construction

AIR FRANCE-KLM Group SAINT-GOBAIN BOUYGUES

LAFARGE VINCI

Food and Drug Stores Apparel Insurance (Mutual)

CARREFOUR L’OREAL GROUPAMA

LVMH

Insurance (Life/ Health) Publishing, Printing Railroads

AXA LAGARDERE GROUPE SNCF

Utilities

AREVA

GDF SUEZ

ELECTRICITE DE FRANCE

French Financial Markets Fuelled by Major Large Companies

French Main Stock Exchange Index Cac 40 Composition

VIVENDILVMH MOET VUITTON

VINCILAFARGE

VEOLIA ENVIRONNEMENTL'OREAL

VALLOURECGDF SUEZ

UNIBAIL-RODAMCOFRANCE TELECOM

TOTALESSILOR INTERNATIONAL

TECHNIPEDF

SUEZ ENVIRONNEMENT COMPANYEADS

STMICROELECTRONICSDANONE

SOCIETE GENERALECREDIT AGRICOLE SA

SCHNEIDER ELECTRICCARREFOUR

SANOFI-AVENTISCAP GEMINI

SAINT GOBAINBOUYGUES

RENAULTBNP PARIBAS

PUBLICIS GROUPEAXA

PPRARCELORMITTAL

PEUGEOTALSTOM

PERNOD RICARDALCATEL-LUCENT

NATIXISAIR LIQUIDE

MICHELINACCOR

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- Expatriate allowances are not taxable in France. - This provision is applicable for individuals who have not been tax residents of

France at any time during the 10 calendar years preceding their transfer to France.

- The legislation applies to employees of a company registered outside France who are sent to France to take up employment with a company registered in France for a ‘limited’ period of time.

- Patrimony outside France is not subject to the nation’s Wealth Tax. - Exemption of pension insurance contributions for impatriate employees.

Favorable Tax Status to Attract Foreign Talent in France

447 560294

601339

467

276 100

29

293

13

342

595864

549

594

570

648

0

200

400

600

800

1000

1200

1400

1600

1800

Paris London Berlin Brussels Amsterdam Geneva

Income tax & gross up cost Total Social tax cost Total salary and expatriate allowances Source: Ernst & Young, 2008

Comparative Cost of Expatriates in European Cities (gross annual salary, $500,000)

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Productive Work Force

- France ranks 3rd in the world, after Norway and the US, for labor productivity per hour.

- Lowest cost structure in Europe.

- Companies can set up in 7 days.

- France received the highest marks worldwide for its government’s performance in adapting to economic change (IMD, Lausanne, 2008):

- Exemption from tax and Social Securitycontributions on overtime hours.

- Greater flexibility for overtime hours; raisedlimit for management staff to 235 work days(from 218).

- A new type of work contract with extended trial period; new procedure to terminate a contractout of court.

Source: International Labor Organization – KILM 2008

0 5 10 15 20 25 30 35 40

Germany

United Kingdom

Denmark

Sweden

Netherlands

Belgium

Ireland

France

United States

Norway

Labor productivity(GDP per hour worked)

0 20 40 60 80 100 120

Germany - 10th

Japan - 9 th

Ita ly - 8 th

N etherlands -7 th

U.K. - 6 th

F rance - 5 th

A ustra lia - 4 th

USA - 3rd

C anada - 2nd

M exico - 1st

Comparison of total business costs(Country with lowest cost ranks 1st – Overall results US=100.0)

0

5

10

15

20

25

30

35

40

45

50

B el gi u m

D en m

a rk

U SA

F ra nc e

I t al y

N et he rl a nd s U K

S we de n

G er ma ny

J ap an

I nd ia

C hi n a

S pa i n

0

2

4

6

8

10

12

14

16

Time (days) Procedures (number)

Setting up activities Time/ procedures

283 French Banks are in the Top 20 worldwide in terms of total assets

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France, A Major Insurance player in the World

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- France has 71 innovativeclusters, weaving a networkof players at the forefront ofinnovation.

- 2,000 R&D projects launchedsince 2005 by participatingcompanies, mobilizing morethan 10,000 scientists andnearly €4 billion of R&Dexpenditures.

- Foreign companiesparticipating in clusters represent nearly 500 sites and 173,500 employees.

Boosting International Clusters

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- Financing of SMEs and innovation - Metnext, Bluenext- High-tech companies

- Research and innovation- EIF/ Institut Louis Bachelier (Research Chair)- European Institute for Financial Regulation (EIFR)

- Education- Schools & Universities

- Data and services- European financial information platform

- Enhance the role of finance in social and environmental innovation- Sustainable finance, SRI project, environmental finance

Finance Innovation ─ Financial Services Cluster

Promoting & Promoting &

Developing Developing

the Paris the Paris

Financial Financial

Markets in Markets in

EuropeEurope

Paris EUROPLACE ActivitiesParis EUROPLACE mission is to leverage the collective strengths to achieve the

greatest efficiency and openness of the Paris Financial center.

ThinkThink --tanks & lobbyingtanks & lobbying

Contributing to European workingContributing to European working --groupsgroups

A new initiative: The Financial Services ClusterA new initiative: The Financial Services Cluster

ResearchResearch

International financial forumsInternational financial forums

Financial center’s main features

Individual Investors

InstitutionalInvestors

Market infrastructures

Issuers:

Equity DebtSIV

Derivatives

Financial Intermediaries:

-Fund managers

-Corporate finance and market

Transparency

Product offeringCompetitive fieldRisk management

SafetyRisk Mutualisation

Regulatory Authorities

(Banking, Insurance, Financial markets regulation and supervision)

Regulatory Authorities

(Banking, Insurance, Financial markets regulation and supervision)

Financial Marketplace OrganizationA service provider

to its users

Strategic Role

− Optimize savings

− Finance the economy

− Provide services for industries

− Develop high added-values skills

Education & Research

Banking, credit, loans

BUY SIDE FUNDING/CREDIT

Support Functions

(consulting, legal, IT…)

SMEs in

Financial

Services

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www.paris-europlace.net