France's NEU CP Market Celebrates 40 Years of Innovation and Sets Sights on European Integration

This week, the French Negotiable Debt Securities Market (NEU CP) marked its 40th anniversary, showcasing its evolution into a cornerstone of short-term financing both for France and the wider European Union.

The NEU CP market stands out for its dynamic role in providing short-term funding alternatives to traditional bank loans, supporting a broad range of issuers including corporations, public entities, and financial institutions. As of October 2025, outstanding short-term securities in the EU reached approximately €2 trillion, with NEU CP accounting for a significant €310 billion, illustrating its leadership in euro-denominated issuance and its key function for non-financial corporations. This market not only enables flexible, cost-effective financing strategies for issuers, but also serves as a sensitive conduit for monetary policy, transmitting changes in the European Central Bank’s key interest rates more rapidly than traditional bank lending. Nevertheless, the market's vulnerability during stress periods, such as in March 2020, highlights the ongoing need for enhanced resilience, digitalization, and transparency—a goal where NEU CP already excels but continues to pursue further improvement.

Three pillars underpin the NEU CP's success: a clear regulatory framework that supports transparency and security, robust post-trade infrastructure connected to Euroclear and the Eurosystem’s own platform, and its recognized eligibility as high-quality collateral by the ECB, annually reviewed to maintain investor confidence and liquidity. The market’s transparency also facilitates ESG-labelled issuance, reinforcing its attractiveness in today’s investment climate.

Looking ahead, France is preparing regulatory reforms for 2026 aimed at making the NEU CP even more accessible to European participants by reducing barriers and simplifying requirements. Yet, broader harmonization at the European level is necessary to create a more unified market, which Denis Beau advocates could be achieved through measures such as an EU-wide passport for commercial paper issuers based on the successful NEU CP model. Technological innovation will play a critical role in this transformation; the launch of Project Pythagore, in partnership with Euroclear, intends to migrate the NEU CP market to a blockchain-based infrastructure, paving the way for greater automation, transparency, and integration, as well as early adoption of central bank digital currency settlement by 2026.

This anniversary not only highlights the NEU CP’s importance as a financial innovation hub within France but also underscores its potential to lead the way toward a more integrated and resilient European short-term debt market.