Presentation of the 2021 Annual Report of the Autorité de contrôle prudentiel et de résolution (ACPR) Press conference, 31 May 2022  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 8 Ladies and Gentlemen, I am very pleased to welcome you to our presentation of the Annual Report of the Autorité de contrôle prudentiel et de résolution (ACPR – Prudential Supervision and Resolution Authority), in the company of Jean-Paul Faugère, Vice-Chairman of the ACPR, Dominique Laboureix, Secretary General of the ACPR, and Alain Ménéménis, President of the Sanctions Committee. Last year was marked by a vigorous recovery of our economy, during which our financial sector proved particularly robust (I). 2022 should now see substantial advances on the regulatory front (II). However, the war in Ukraine is posing new risks to the financial sector, calling for heightened vigilance (III). In all these situations, the women and men of the ACPR have worked tirelessly to ensure that the French financial system remains resilient under all circumstances, providing adequate financing to the economy. I would like to extend my warm thanks to them. ** I. The strength of the French financial sector is more than ever an asset for our economy I shall start with just a short word on the situation for insurers, which Jean-Paul Faugère will go into in greater depth.
In practice what that would be likely to mean in our present situation is substantially lower interest rates: the intended effect would be to stimulate external demand, but it would inevitably also involve further stimulus to domestic demand. In effect, it implies that we should acquiesce in increasing overall demand pressure leading inevitably to faster inflation. That might conceivably even BIS Review 31/2000  2  provide some relief to the suffering sectors in the short term. But increasing demand pressure, including labour market pressure, and accelerating inflation would - as we’ve repeatedly seen in the past - ultimately need to be brought back under control, involving a more abrupt tightening of policy. That frankly would not do the suffering sectors themselves much good at least for very long - and it would have a potentially serious destabilising effect on the economy as a whole. That is precisely what we are trying to avoid. And there, I do rest the case for the defence - at least in relation to the principal charge of malice aforethought - or even malice as an after thought. Just as some of you would like to see the euro strengthen from your microeconomic standpoint, so too would I, from a macroeconomic perspective, because it would help to restore a better, more sustainable, balance within the economy.