Paris Europlace International Financial Forum – Paris, 9 July 2019 New Frontiers in Finance  Speech by François Villeroy de Galhau, Governor of the Banque de France  Press contact: Mark Deen (mark.deen@banque-france.fr; +33 6 88 56 54 03). Page 1 sur 5 Ladies and Gentlemen, It is a pleasure to be with you today: this Paris - Europlace International Financial Forum is more and more “the place to be”, as France and Paris are increasingly stimulating first-movers in Europe. The theme of this Forum – “New Frontiers in Finance” – prompts us to look towards new territories that we have to explore and conquer. Regarding finance, I will focus on two of them: digitalisation and green finance. But before looking at the future, let me stress two prerequisites for the present. ** I. Two prerequisites for the present My first message is to welcome the new European team, nominated in Brussels last week, starting with Christine Lagarde and Ursula von der Leyen. Once again, albeit at the last minute, albeit under the threat of a crisis, Europe has proved itself to be decisive and innovative. Now, it is time to begin the fundamental work on a true financial Eurosystem. Let us look beyond Brexit, and beyond the somewhat disappointing debates on the euro area budget. The top priority on the European agenda should be a Financing Union for Investment and Innovation, which will channel our abundant private savings through a combined Banking Union and Capital Markets Union.
Firms need this in order to raise equity and find European venture capital; keeping a European capacity in investment banking is a strategic imperative. Financial players need this in order to conduct cross-border mergers: European banking consolidation is overdue, and it is indispensable, not to reduce competition – quite the opposite – but to reach the critical mass necessary to make digital investments and allow savings to circulate. And, lastly, the euro area needs it in order to finally have an effective economic stabilisation tool to weather the shocks affecting some countries: “private risk sharing” is effective between states in the United States. If one doesn’t want a fiscal union – duly noted –, one must make even more resolute progress on the Capital Markets Union. We have talked enough about this, and it is now time to take concrete  Page 2 sur 5 measures: this must be the ambition of the new Commission. The ECB will support it, and France will be a committed player. My second prerequisite is the successful implementation of Basel III. It is vital that we do not forget the lessons from the financial crisis, nor break the promise we made in 2017. But this transposition must be fair – naturally involving the United States – and reasonable. The first estimates of capital requirements are premature and do not give the horizon: Basel III will be finalised only in 2027.