Presentation of the 2018 annual report of the Autorité de contrôle prudentiel et de résolution (ACPR) Press conference of 28 May 2019  Speech by François Villeroy de Galhau, Governor of the Banque de France, Chairman of the ACPR  Press contact: Mark Deen (mark.deen@banque-france.fr). Page 1 of 5  Ladies and Gentlemen, [Slide 1] I am pleased to welcome you to the presentation of the 2018 annual report of the Autorité de contrôle prudentiel et de résolution (ACPR), alongside Bernard Delas, ViceChairman of the ACPR, Rémi Bouchez, President of the Sanctions Committee, and Edouard Fernandez-Bollo, Secretary General of the ACPR. In 2018, the women and men of the ACPR continued to work tirelessly to safeguard financial stability, in a context marked by the uncertainty – and at times the emergency – of Brexit. I would like to thank them for their work. This morning, I shall focus on a topical issue – the profitability of banks and insurers in France and Europe [slide 2]. **  I. The profitability of French banks and insurers remains resilient  The return on equity of France’s largest banks edged up by 0.4 percentage points to 6.7% in 2018,i coming back in line with 2015’s level. The maintenance of profitability levels needs to be viewed alongside the sharp rise in bank capital. French banks have strengthened their solvency and are now more robust. They have more than tripled their capital since the crisis.
That said, private sector actors do not need to wait for public authorities to do everything before starting to think about consolidation strategies. Lastly, we also need to ensure that institutions are treated equally under international regulations. If we are to reach an agreement, two conditions must be met. The transposition of Basel III must be reasonable and take into account the application of the “output floor” at  Page 4 of 5  the highest level of consolidation. Above all, the transposition must be fair and applied to the letter in all jurisdictions, including in the United States. Let me be clear about one thing, however: the solution to our banking challenges is not deregulation but rather innovation; not a step backwards – towards the financial crisis – but a leap forwards. III. We need to remain fully mobilised with regard to two deadly risks: ALM/CTF and cyber-security  The fight against money laundering and terrorist financing (ALM/CTF) calls for unwavering commitment. The 23 inspections carried out by the ACPR revealed major failings in supervised entities’ compliance with their AML/CTF and asset-freezing obligations. In 2018, the Sanctions Committee imposed nine sanctions, one of which amounted to EUR 50 million. In parallel with the Financial Action Task Force’s assessment of France in 2020, the ACPR will be closely involved in the implementation of a robust and renewed AML/CTF system at the European level.