However, I call upon the institutions of the Paris financial centre to continue demonstrating prudence and responsibility in their search for client resources. The Banque de France and the Prudential Supervisory Authority will be vigilant in this respect. It is vital that market conditions be fully accounted for in setting the level of interest on financial products, whether offered by banks or life insurers. It is also best if preference is given to the collection of long-term savings that are indispensable for financing the economy. Indeed, I am actively seeking the support of the government with regard to this objective. The Bank will seek to ease the individual adaptations required by these numerous new regulatory frameworks. In particular we will strive to facilitate the management of liquidity and collateral, notably by continuing to support the mobilisation of lending to the economy via refinancing operations with the central bank, but also via markets. In this perspective, and at the initiative of the Banque de France, a Paris financial centre working group has been set up to develop innovative and safe securitisation mechanisms that should allow banks to make better use of the pool of claims on their balance sheets and to strengthen their financing capacities. The Bank will also continue to mobilise all parties concerned, and in particular companies, in order to accelerate and successfully implement France’s migration to SEPA payment instruments that should be finalised by 1 February 2014 for credit transfers and direct debits.
But remote events do happen – and by their nature we cannot always see them coming. Researchers at the World Bank have recorded 13 borderline or full-blown financial crises since the late 1970s, involving at least one Financial Stability Forum (FSF) member country. 1 And there are well known incidents not on the list: including the 1987 crash, the less developed countries’ debt crisis and LTCM’s near collapse. So we are fortunate in having a time of relative calm to work out together how we should react when a problem does arise. And we have in the FSF a body that was established “to co-ordinate the efforts of …various bodies in order to promote international financial stability, improve the functioning of markets, and reduce systemic risk” 2 . In its first 7 years, much of the FSF’s focus has been on the identification and assessment of risks in a rapidly changing financial system; it has played a valuable role in building a common understanding among authorities and among market participants of what the risks are and how they can be reduced. However, that level of progress has been less apparent on putting in place arrangements for handling and resolving cross-border crises. During that period a number of countries, including the UK, have improved their processes for handling financial crises – including for crises sparked by business continuity events.