Today, we ask the European Commission and President Van Rompuy, who have been charged with this task, to put forward proposals that go as far as possible in this regard: we need to significantly enhance fiscal and economic governance in the euro area. 2  BIS Review 154/2010  Does global governance simply mean the convergence or merging of the approaches followed by the main international bodies? A lot of changes are happening in this regard: the IMF is in the process of reforming its internal governance, with emerging countries being granted more seats. The European countries have agreed to reduce their representation. With regard to the informal governance of the global economy and finance, the G20 has replaced the G7. This means that henceforth all the emerging countries as well as the industrialised countries with a systemic influence at the global level bear full responsibility for the governance of the integrated global economy. How do you envisage this governance developing in the medium and long term? Governance today is still founded on the notion of sovereign states in a “Westphalian” world, which does not correspond to the new governance needs of an integrated global economy. The big challenge right now is to speed up the move to a system of global governance that fits the new world that we have created over time, in particular over the past 20 years following the collapse of the Soviet empire and the conversion of large emerging countries to the market economy.
In this regard, we are naturally supporting efforts by the French Treasury and insurers to improve the prudential treatment of long-term equity investments already during the 2018 review. On a topical note, I would add that it is crucial for supervisors to apply all prudential requirements with equal rigour. The string of failures by insurers doing business on the French market under the FPS, particularly in construction insurance, is a reminder of the importance of this. The ACPR is obviously working hard to deal with this crisis, which is affecting tens of thousands of French policyholders. But the requisite convergence of supervisory practices also needs to become a reality very soon. I know that Gabriel Bernardino and EIOPA are making this a priority. Finally, let me be clear: it is unreasonable to apply the new IFRS17 accounting framework right now, given the current state of the discussions. Aside from the complexities of creating a European governance framework for these standards, there is also an obvious issue of timing, and fortunately, the IASB appears to be reopening discussions on this. Implementing IFRS17, which will be costly and complex, will follow on from implementation of Solvency 2, a process that has kept insurers very busy. Beyond the question of timetabling, there are major substantive issues. We want an agreement on identifying groups of loss-making contracts. As it stands, the draft is unworkable. We also want to see completion of the discussions on the treatment of reinsurance contracts held.