François Villeroy de Galhau: New Year wishes to the Paris financial centre

New Year wishes to the Paris financial centre by Mr François Villeroy de Galhau, Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de resolution (ACPR), Paris, 9 January 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I would like to start by extending, on behalf of the Banque de France and the ACPR, our warmest wishes to you with whom we work, day-in, day-out: financial centre players, elected representatives and public officials, and journalists. In the turbulent environment of 2024, we will need more than ever to counterbalance the pessimism of intelligence with the optimism of the will, and to remind ourselves that a full life combines both professional commitment and personal ties. So, first and foremost, I wish you much joy with those you love as well as in all your new projects in 2024. This year promises to be an eventful one: Monetary Union was 25 years old on 1 January, we will be celebrating 10 years of the European Banking Union, and France will of course be hosting the Olympic Games. There will also be two elections of key importance for our country beyond our borders: the European elections in June and the US elections in November. Because the year ends "in four", I would like to follow a process of simple addition and share 2+2 wishes with you.

The first two wishes follow on from those I made before you a year ago. I would like to return to the economic progress achieved in 2023, and invite us to "finish the job".

1.1 Less inflation and more stabilisation

Inflation remains the main concern of our fellow citizens, and our main mission as a central bank. At the beginning of 2023, I stated here before you that French inflation would pass its peak in the first half of the year – it has since declined from 7.3% in February to 4.1% in Decemberi – and that we should reach the terminal interest rate "by the summer" – this occurred in early September. I also made a "commitment" that barring any new shocks we would bring inflation down towards 2% by 2025 at the latest. A year ago, many people were expressing polite – or not so polite – scepticism. Today, our forecast is much more widely accepted and believed: average inflation of 2.5% in 2024 and 1.8% in 2025. However, confidence does not preclude vigilance; even if the recent rebound in inflation is technical and temporary – it was actually less than expected in December.