While the adjustment to interest rates can be larger – up to 75 basis points - if alternative assumptions are made about cost of crises and the sensitivity of crisis risk to monetary policy, the calibrations required to deliver these outcomes are extreme. Svensson (2017) argues that the costs of using interest rates to lean against financial crisis risk are likely to be greater still if one takes into account that doing so will make the economy weaker at the point a crisis strikes and hence might actually worsen its severity. 24  We would like to thank Karam Shergill and Rhiannon Sowerbutts for collecting these data. 34  All speeches are available online at www.bankofengland.co.uk/speeches  34  Aikman et al (2016) analyse empirically the joint non-linear dynamics of credit, financial conditions and monetary policy in the United States. They find that the transmission mechanism of monetary policy to long-term yields is blunted in high credit states. This suggests that attempts to lean against the wind with monetary policy when credit is already elevated may be futile. Filardo and Rungcharoenkitkul (2016), by contrast, find benefits from using monetary policy to ‘lean’ when the evolution of financial imbalances is extremely persistent. But the general consensus is against deploying monetary policy, at least in an activist way, for financial stability purposes given its limited efficacy and potential real-economy costs. One recent paper that addresses issues of CCyB strategy is Aikman, Giese, Kapadia and McLeay (forthcoming).
As regards housing loans, fixed rate loans - which fortunately represent almost 98% of outstanding loans -  Page 3 of 9 are an essential protection for borrowers, and therefore ultimately for the banks as they limit their default risks. And more generally, rest assured that we will never take any prudential decision that could increase the risk of overindebtedness or of non-repayment of housing loans. The average solvency ratio of the six main French banking groups reached 14.9% at end-2022, still a high level, well above regulatory requirementsi. I welcome the publication yesterday of the report by the Observatoire du financement des entreprises ii, which notes that for this very reason, their access to financing has remained favourable despite the crises. French insurance groups also show high solvency ratios, around 250%, thanks to their dynamic activity and financial results. Page 4 of 9  II. ... and of our regulation and supervision model There are two other reasons why the US banking crises did not affect the euro area this time - although we must remain vigilant: our regulation and supervision. As regards regulation, Basel III in its entirety applies to all European banks, but only to 13 banks in the United States.