CAP and CAP+ (French public credit insurance top-up)

CAP and CAP+ are public credit insurance top-up schemes created by the French state in late 2008, at the height of the financial crisis, then reactivated in 2020 in response to the pandemic. Their logic answers directly to the procyclicality of credit limits. When a credit insurer reduces the limit granted on a buyer, CAP allows the insured to obtain, for a premium, a state-backed top-up restoring all or part of the original limit. When the insurer refuses any cover on a buyer still considered viable, CAP+ offers substitute cover on stricter terms. Export versions were created on the same principle. The schemes rely on private credit insurers, which distribute them and handle claims, while the state bears the risk of the top-up. They illustrate a form of public intervention close to a reinsurer of last resort: the state does not replace the market, it temporarily neutralizes its procyclical behavior, to prevent each insurer's individual prudence from collectively producing a contraction in trade credit.