This approach, known in the literature as risk-based supervision, is the one that has been recommended in the light of the recent crisis. On several occasions, supervision has ventured into what is today termed macroprudence. At the end of the 1990s, the SBIF issued recommendations urging that due attention be paid to the concentration of risks in the real estate sector, beyond what each institution might have on its books. Applying this same logic, it also issued instructions for the treatment of lending to individuals, particularly consumer loans, in the context of the rapid growth of these operations. Then, in the early 2000s, it instructed supervised institutions to carefully assess their clients’ exchange-rate risk, regardless of whether their own positions were well hedged. When mergers and acquisitions intensified a few years ago, it also took the initiative of introducing stricter regulation for banks of a larger relative size so as to guard against systemic risks. Although a factor of a different nature, the development of Chile’s capital market has also contributed to financial stability. The creation of a private pension system brought with it the appearance of institutional investors as well as new sources of medium and long-term financing. At the end of 2008, when international markets became tense, Chilean companies were able to replace external financing with placements on the domestic market on convenient terms and conditions. 3. Remarks in the light of recent experience  The paramount objective of central banks has been and will continue to be price stability.
They make threats, even though Member States have taken strong and positive decisions. Rating agencies behave as if nothing had happened. It may seem that agencies are no longer a useful guide for investors. Would you say that their judgments are based on political criteria? Indeed, in the arguments they develop, there are more political arguments than economic ones. Credit agencies have downgraded the ratings of three large French banks. Are our banks undercapitalised? No, they are very well capitalised, in particular compared to their European and US counterparts. The importance of this downgrade should not be overstated especially since rating agencies have recently downgraded most large banks in developed countries. There is no doubt that the capital buffers of our banks are largely adequate in relation to levels in the global banking system. It is true that we are asking them to enhance their soundness in order to meet the new regulatory requirements that have been agreed at the European and global level. Banks are doing this through their own resources and needless to say without State aid. That is why I have no concerns about the French banking system. Should banks’ customers, companies and individuals, fear a credit crunch? No, and the figures bear it out. French banks’ lending activities remain very robust: up 8% for mortgage lending, up 5.6% for corporate lending and up 5.1% for lending to SMEs. It is precisely their retail banking business that makes them sound and profitable.