When spending excessively, it is wise to choose one's creditors with care. France, which has one of the highest debt-to-GDP ratios in Europe (117% of its national wealth), has raised some concerns in this regard. Its debt, which had until recently been largely held by public institutions, banks and insurers, is increasingly owned by speculative funds commonly known as hedge funds. "The investor base of French debt is shifting toward less stable holders," warned the country's central bank, the Banque de France, in its financial stability report on June 26.
The influence of hedge funds on France's debt has not been subject to any official evaluation. What can be affirmed is that, according to the Banque de France report, which based its observations on a European Central Bank (ECB) survey, hedge funds account for more than half of the requests submitted to the banks responsible for selling French debt each week. Another striking figure is that financial institutions based in the Cayman Islands, most of which are hedge funds, held $64 billion (€55 billion) in French bonds in June 2025, an increase of almost 30% over six years, according to data published semiannually by the Securities and Exchange Commission, the US financial markets regulator. That represents only a very small proportion of France's total debt, which has passed €3.5 trillion. While these funds represent only a minor share of the overall stock, they have nonetheless become the dominant players in trading.
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