This is precisely the spirit of "Pillar 2" of the Basel framework. Supervision can and must be responsive, intrusive - including with on-site inspections -, exercised by highly qualified professionals, and applied forcefully. This is not wishful thinking: we have been practising it for decades at the ACPR, and for years now in the SSM. I would like to pay tribute to the ACPR's expertise and to the acclaimed work of its 1,050 women and men: it is indeed a certain "French-style supervision" model that inspired European-style supervision, under Danièle Nouy, the first Chair of the SSM, and which is still in place today under Andrea Enria. This active supervision is one of the greatest success stories of our European Banking Union. The SSM demonstrates the benefits of bringing all players under one main authority only, rather than under regional supervisors, with clearly defined responsibilities and coordination. This also allows for comparisons and for thematic on-site missions to be carried out. Page 6 of 9 Furthermore, our active supervision demonstrates the strong value of regular stress tests, including on interest rate risks, which are also applied to smaller institutions. The European Banking Authority (EBA) conducts an EU-wide bank stress test every two years, taking into account the latest macro-financial developments: in 2023, the stress test scenarios are typically based on a sharp rise in short and long-term interest rates.
In addition, under the EBA's Interest Rate Risk of the Banking Book (IRRBB) guidelines - as part of the rigorous application of the Pillar 2 provisions - published in 2018 and enhanced in 2022, European banks are required to conduct regular prudential stress tests to measure the impact of interest rate changes on their interest margins and the economic value of their capital; US regional banks such as SVB are not subject to this requirement. As regards the regulations of insurers, the general approach adopted in June 2022 by the European Council on amendments to the Solvency II Directive is in line with several of the ACPR's objectives: overall neutrality of quantitative requirements on the French market, support for long-term investment with more stringent requirements in terms of sustainable finance, better rules for crossborder transactions and better application of the principle of proportionality. It is now very important that the European Parliament adopt this directive as soon as possible, so that it can be implemented quickly and without being diluted. III. Areas to be enhanced in the short and medium term Resolution is another cornerstone of the Banking Union. However, the fact that the Swiss authorities opted for a merger in the case of Credit Suisse raised new questions about how to make resolution more operational and reliable. Let me share just two thoughts at this point. The first concerns the resolution of large or even systemically important banks.