It hosts one of the most developed capital markets in continental Europe, four global banks, the first insurance and asset management industry, a leading bond market, the largest commercial paper market with NEU-CP and the largest private equity investor in continental Europe. In addition, French financial authorities, including the Banque de France, are working together to facilitate the dissemination of sound and safe financial innovations and fostering the scaling up of sustainable finance. Green finance in particular is one of our priorities, and this is the reason why, at the One Planet Summit last December, the Banque de France launched the Network for Greening the Financial System (NGFS), together with central banks and supervisors from all over the world. Moreover, a number of international banks have decided to transfer the bulk of their market activities to Paris, and Japanese financial institutions will always be welcome in Paris. 2. Beyond Europe, our collective questions Let me turn to the global questions that we have to address together, starting with Japan and France. I guess our views are very close here. There are increasing tensions in the global environment, starting with protectionism. Beyond the direct trade policy shock resulting from a rise in import tariffs, two factors at least may amplify the decline in global GDP: a decline in investment demand caused by firms’ falling business confidence due to uncertainty, and a rise in the financing cost of capital due to an increase in actual or perceived borrower risk.
In our most recent forward guidance we have said that we will maintain our policy interest rates at current levels – including our negative deposit facility rate – until at least through the summer of 2019; Our fourth instrument is the provision of liquidity and credit to banks. The second series of TLTROs are still outstanding, as is FRFA. Such operations could be considered again – possibly with different terms – if warranted. So our quartet will shortly become a trio but the tune will remain strong. The score, however, will change over time and we should continue to play in a harmonious way. In sequence: in my view, we should reduce the rate of reinvestment only after the first increase in interest rates. And so, we are not obliged to rush, as early as at our December meeting, to set out the precise length of our reinvestment period. We should also play the trio in synergy, I would even say in symphony. 1/3  BIS central bankers' speeches  Like any orchestra, we need to be able to adapt the normalisation of our monetary policy tempo (allegro or andante) and intensity, according to economic data. In short, we are very clear about our objective – normalisation following non-standard policies – and about our sequence, but we should remain very pragmatic along our path. Another and somewhat related challenge – as monetary policy cannot be the only game in town – is the continuation of structural reforms in countries where they are needed.