(b) Finalise the adoption of a European resolution framework for CCPs and insurers The resolution of CCPs is the last major topic on the FSB’s work programme. By reinforcing the central role of CCPs in the markets, the new framework risks creating entities that are “too big to fail”: it is important therefore that we have tools to handle CCP crises efficiently, without resorting to a state bail-out that would ultimately leave taxpayers bearing the cost of default. As a result, after having set out strong expectations in 2017, the FSB is currently refining an international CCP resolution framework, which will be enshrined in a new European regulation. In insurance, France is one of the first EU Member States to have put in place a recovery and resolution regime for insurers with the Sapin 2 Law of 9 December 2016. The Order of 27 November 2017 also gave the ACPR’s Resolution College the power to start resolution proceedings for failing insurers and take steps to maintain their critical functions or safeguard financial stability. The framework comprises a preventive arm, under which the largest insurers are obliged to draw up preventive recovery plans. At the European level, there is currently no shared approach to the resolution of insurers. However, there is clearly a need for such a framework to facilitate the resolution of insurers, in particular cross-border groups, and help strengthen the European insurance market for the benefit of policyholders (c) Finally, and most of all in my view, it is also “time for macroprudential policy”.
Stress tests have thus contributed to an increased resilience of the financial system: (i) Stress tests shore up banks’ capital positions by serving as a basis for calculating additional capital requirements (“Pillar 2 Guidance” or P2G); (ii) the publication of individual stress test results, which is accompanied by the disclosure of individual bank data, ensures transparency and enhances market discipline; (iii) regular stress test exercises under the aegis of the supervisory authority encourage banks to develop their internal risk management processes and information tools. 3/7  BIS central bankers' speeches  The comparison over time of the aggregate results of the stress tests conducted by the EBA and the ECB testifies to the increased soundness of European banks. In the event of an adverse scenario, the 2018 stress test showed that the banks’ solvency ratio would be 9.9%, i.e. 100 basis points higher than the level obtained by the stress test conducted in 2016. However, we must be careful not to become complacent: risks are increasing and, while some recent events have confirmed the relevance of the instruments deployed (see in particular the H2O incident), the fact that they ultimately proved benign does not mean that in a stressed market environment the outcome would not be less favourable. It is therefore vital to continue to shore up the resilience of the financial system  2. We should not take it for granted that the financial system has been sufficiently reinforced 2.1 VULNERABILITIES ARE EVOLVING AN INCREASING  Global macroeconomic risks have increased markedly.