Overview of Banque de France and ACPR'S work on financial stability
This page brings together work and news of the Banque de France and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) related to financial stability.
Joint Action by the Banque de France and the ACPR for Financial Stability:
The ACPR and the Banque de France work closely together to anticipate and take into account the interactions between macroprudential policy and monetary policy. The two institutions are also jointly responsible for calibrating certain macroprudential instruments defined in the European directives and regulations on capital requirements for credit institutions. This collaboration is embodied in particular in their contribution to the Haut Conseil de Stabilité Financière (HCSF, High Council for Financial Stability). The HCSF is responsible for the supervision and prevention of systemic risk, i.e. a dysfunction of the financial system as a whole leading to a deterioration in its ability to perform its fundamental function of financing the economy. The HCSF formulates opinions and recommendations for the players in the financial system. It also has binding powers: it can, on the proposal of the Governor, impose additional capital requirements on financial institutions, limit redemptions on insurance contracts or set lending criteria.
The studies conducted jointly by the ACPR and the Banque de France make it possible to provide individual comparisons that are useful for the day-to-day exercise of prudential supervision and for analysing sectoral and macroeconomic risks, thus linking the overall, cross-sectoral view of the financial system with the individual consequences. This approach benefits both the banking and insurance sectors. For the insurance sector in particular, it contributes to the control of risks borne by bancassurance conglomerates, as well as to the control of interest rate risk.
The Financial Stability Unit brings together the relevant divisions of the Banque de France (Financial Stability and Operations Directorate - DGSO) and the General Secretariat of the Autorité de Contrôle Prudentiel et de Résolution (Research Directorate, International Affairs Directorate). Its aim is to increase the capacity for anticipation in order to maximise the effectiveness and influence of the Banque de France and the ACPR in terms of financial stability and regulation.
The Unit aims to take a cross-cutting approach to financial stability by coordinating the various skills within the Banque de France and the SGACPR. It is intended to complement existing interactions and exchanges, whether they concern the conduct of monetary policy operations, the supervision of financial markets and payment systems infrastructures, or the monitoring of the individual situation of credit institutions, insurance companies or mutual insurers.
The Banque de France and the ACPR work together to promote financial stability in four areas: assessing the vulnerabilities of the financial system as a whole, identifying climate change-related risks, monitoring regulatory developments and developing studies on financial stability.
1. Monitoring Vulnerabilities
The Banque de France and ACPR teams closely monitor the vulnerabilities of the French financial system. Their analyses are published twice a year in the Report on the Assessment of the Risks and Vulnerabilities of the French Financial System, which is steered and coordinated by the Financial Stability Directorate of the Banque de France.
The Banque de France and ACPR studies also inform the publications and decisions of the High Council for Financial Stability.
2. Identifying climate-related financial risks
In March 2021, the Banque de France announced the creation of a "Climate Change Centre", integrated into the Financial Stability Unit. Its three main missions are:
- to coordinate the actions of the Banque de France and the ACPR relating to climate change issues;
- to analyze the risks associated with climate change in the financial sector, in close collaboration with all the business experts of the two institutions;
- and to provide the secretariat for the Network of Central Banks and Supervisors for the Greening of the Financial System (NGFS).
The risks associated with climate change, whether physical or transitional, are a source of financial risk. As part of their financial stability mandate, the Banque de France and the ACPR are working to gain a better understanding of the exposure of the French banking and insurance sectors to these risks and to ensure that they are able to cope with them.
The Banque de France and the ACPR have been working in this direction for several years. In 2020, the ACPR launched a climate pilot exercise, testing the resilience of French Banks and Insurance entities to financial risks linked to climate change up to 2050.
The ACPR also set up a Climate and Sustainable Finance Commission at the end of 2019. Its main task is to advise the ACPR on how to consider climate change in its operations and on the latest developments in the field of sustainable finance. It also contributes to the ACPR's monitoring of the commitments made by the financial intermediaries under its jurisdiction. It brings together representatives of the financial sector, the academic world and representatives chosen from associations or think tanks active in the field covered by the Consultative Commission.
3. Financial Stability Policy
The Banque de France is directly involved in the work of international bodies whose primary mission is to contribute to financial stability at the global or European level. In particular, it participates in :
- Financial Stability Board (FSB) at G20 level
- European Systemic Risk Board (ESRB) at European Union level
- Committee on the Global Financial System (CGFS)
- Basel Committee on Banking Supervision (BCBS) on banking supervision, together with the ACPR
- The Central Banks and Supervisors’ Network on Greening the Financial System (NGFS), together with the ACPR
The ACPR participates in the main international and European bodies dealing with banking and insurance. It actively contributes to the definition of international standards and the development of European regulations. It also pursues an active policy of cooperation with its foreign counterparts. In particular, the ACPR participates in :
- Single Supervisory Mechanism (SSM)
- European Banking Authority (EBA)
- ESAS Joint Committee
- International Association of Insurance Supervisors (IAIS)
- International Organisation of Pensions Authority (IOPS)
- European Insurance and Occupational Pensions Authority (EIOPA)
4. Financial Stability Studies
In recent years, the Banque de France and the ACPR have strengthened their internal study and research capabilities, while relying on external partnerships. These studies cover systemic risks, sector-specific risks, stress tests and the coordination of regulatory impact studies. The ACPR also conducts thematic analyses (solvency, liquidity), comparative studies and research papers. In addition, the ACPR's Scientific Committee, made up of internal members as well as representatives of the French academic world, is responsible for preparing advisory notes and alert notes for the ACPR's Supervisory Board.
Analysis and synthesis no. 122: The main results of the 2020 climate pilot exercise
- Publié le 09/06/2021
- PDF (3.55 Mo)
Capturing banking flows: The predominant role of OFCs in the international financial architecture
- Publié le 12/11/2020
- 44 page(s)
- PDF (3.48 Mo)
Mis à jour le : 08/10/2021 10:34