Ladies and gentlemen,
I am delighted to welcome you to this new edition of the ACPR Conference. The theme of this gathering, “Competitiveness and resilience in the financial sector: oxymoron or complementarity?”, is particularly timely in today’s global economic and financial environment, marked by uncertainty and profound geopolitical, technological and climate-related shifts. However, I would like to look beyond the apparent contradiction and show that resilience and competitiveness are in fact mutually reinforcing objectives. I will begin by outlining the challenges posed by today’s macroeconomic environment (1), before explaining how the European financial sector’s resilience rests on three requirements (2), and then sharing three convictions on how to strengthen its competitiveness and resilience in the years ahead (3).
1. The macroeconomic context represents a new test
The current macroeconomic context represents a new test for the European financial sector. Since the summer, sovereign bond yields have risen in all advanced economies, driven by a combination of factors: the ongoing conflict in the Middle East and its impact on inflation, expectations of central bank rate increases and a sharp rise in corporate bond issuance. In France, this upward pressure on yields has been amplified by the uncertainty surrounding the budget. Higher sovereign yields are increasing the cost of servicing public debt and raising concerns about the trajectory of public finances. But we can act. It is essential that we adopt a budget before the end of the year that brings the government deficit down to below the threshold of 5% of GDP.i This is not just a matter for government financing: if interest rates continue to rise, borrowing will become more expensive for both households and businesses, which will in turn weigh on the financing of the economy and on growth.
Fortunately, banks and insurers are well-equipped to cope with this new environment. They have proved their resilience in recent years by weathering some exceptional shocks: the Covid-19 pandemic, the rapid rise in interest rates that began in 2022, and the banking sector turbulence of 2023. Today, they continue to fully play their role as a shock-absorber, supporting the financing of the real economy. This resilience is reflected in the continued flow of credit to the economy, strong life insurance inflows and robust profitability.