Local Fund Management

Some local governments also use the notation to assess their client image from financial institutions.
Representing a significant market potential, and a limited risk of default, local authorities have benefited from the years 1990 positive effects of competition between banking intermediaries:

* Commoditization of credit to local authorities;
* Lowering the cost of credit;
* Strengthening innovation in the development of formulas to simplify the method of debt management and financing tailored to different aspects of local budgets.

With the strengthening of financial independence and their need for funding, the decentralization offers new opportunities and banks are continuing their efforts to penetrate while searching for a quality signature.

The landscape of local funding has therefore changed with the advent of increased competition between the banking intermediaries and diversification of the offer. The complexity of the financial environment for local communities contributes to the professionalization of their financial functions that adopt progressive methods of reasoning of private management to optimize and streamline the management of debt:

* Arbitrage rate to reduce the risk of exposure;
* Active management of cash;
* Tighter budgetary control which requires the identification of commitments vis-à-vis third parties and to book, upstream, the necessary funds;
* Taking into account the multi-annual dimension of public management in local part of a prospective approach.

These developments are a key factor in terms of financial innovation. The banks have set up the financing products (cash management, lending short-term interest rate hedging ...) and services (value of active management of debt, project financing, investment of windfall ...) enabling them meet the new budget and financial practices of local communities.

The rise of the finance function in different directions with a strong accounting is also an important vector of disintermediation. Funding for local government being deregulated, they can raise funds directly in financial markets. New financial instruments of capital markets are, therefore, supplements or alternatives to traditional bank financing. Faced with disintermediation of financing local authorities, banks offer services in financial engineering and step up their financial activities in addition to traditional banking activities.

It should however be noted that the financial instruments are much more complex than the traditional bank loan, they can be handled only by large communities that have the expertise and responsiveness necessary to make the most of market opportunities. The disintermediation is to funding of local remains generally high banked.