IMF国际货币组织全球-France_Financial-System-Stability-Assessment_74页_2mb

France Financial System Stability Assessment Summary

Core Content

The Financial System Stability Assessment (FSAP) report on France, prepared by the International Monetary Fund (IMF) in July 2019, evaluates the stability of the financial system and outlines key vulnerabilities and policy recommendations. The assessment highlights both progress and ongoing risks in the French financial sector, which is dominated by internationally active financial conglomerates.

Main Findings

• Macrofinancial Conditions:

  • Economic growth declined in 2018 but remained relatively resilient, with real GDP growth peaking at 2.3% in 2017.
  • Credit growth has been robust, supported by accommodative monetary policy, with a credit-to-GDP gap of 2.7% at end-2018.
  • Private and public sector debt levels are high compared to the Euro Area (EA), reducing the capacity to absorb shocks.

• Financial System Structure:

  • The French financial system includes four Global Systemically Important Banks (G-SIBs), one large global asset manager, one global systemically important insurer, and one large global reinsurer.
  • Total financial system assets amount to about 600% of GDP, with nonbank financial assets reaching 40% in 2017.
  • The insurance sector is among the largest in the EU, with over 700 firms, and investment funds hold assets equivalent to 60% of GDP.

• Key Vulnerabilities:

  • Banks have adequate capital and liquidity buffers but face risks from rising wholesale funding costs and potential liquidity fragmentation.
  • Insurers are broadly resilient but have concentrated exposures to parent banks, increasing systemic risk.
  • Corporate and household debt levels are high, and some banks have significant exposures to highly indebted corporations and less creditworthy households.
  • The banking sector's profitability is subdued, and the reliance on wholesale funding remains substantial.

• Interconnectedness:

  • Financial conglomerates (FCs) are a key feature of the system, with complex structures and common exposures across sectors.
  • There are significant cross-border and non-EU exposures, especially in the insurance and investment fund sectors.
  • Contagion risks are present due to the interconnected nature of the financial system.

Key Policy Recommendations

• Preemptive Management of Systemic Risks:

  • Authorities should evaluate the effectiveness of macroprudential measures and intensify monitoring of risks.
  • Consider the use of a sectoral systemic risk buffer (SRB) and expand macroprudential tools for corporates and nonbanks.
  • Engage with the ECB and other EU agencies to implement bank-specific Pillar II measures to address residual risks.

• Liquidity Management:

  • Additional liquidity buffers in all major currencies, including U.S. dollars, should be considered to mitigate risks from wholesale funding disruptions.
  • Develop liquidity risk management requirements and stress testing at the conglomerate level with the ECB and other EU agencies.

• Financial Conglomerate Oversight:

  • Strengthen conglomerate-level monitoring and oversight by implementing regular reporting of intragroup exposures and transactions.
  • Enhance cross-sectoral supervision and integrate liquidity and solvency risk management practices.
  • Finalize common reporting templates and supervisory guidance for conglomerates through coordination with the ESAs and ECB.

• Governance and Financial Integrity:

  • Ensure operational independence and autonomy for the ACPR and AMF in determining resource levels based on forward-looking needs.
  • Recuse government involvement in supervisory decision-making committees to avoid conflicts of interest.
  • Enhance AML/CFT supervision of high-risk smaller banks and explore systematic guidance on detecting terrorist financing activities.

• Crisis Management and Resolution:

  • Strengthen the insurer resolution framework by including bail-in powers and private financing mechanisms.
  • Develop modalities for providing Emergency Liquidity Assistance (ELA) in non-euro currencies and establish general rules for identifying eligible assets as collateral.
  • Review and reform the regulated savings framework under Loi PACTE to reduce the spread between market interest rates and returns on regulated savings products.

Main Viewpoints

• The French financial system has made progress since the 2012 FSAP, with improved capital and liquidity positions.
• However, systemic risks remain due to high debt levels, concentrated exposures, and the complex nature of financial conglomerates.
• The incomplete Banking Union (BU) and slow progress towards the Capital Markets Union (CMU) contribute to uncertainty and limit faster shifts in business models.
• The bancassurance model and diversified business lines within FCs have contributed to stability but also increased complexity and interconnectedness.

Key Information

• The FSAP mission was led by Udaibir Das and Naomi Griffin, with contributions from numerous IMF staff and external experts.
• The report is part of bilateral surveillance under Article IV of the IMF's Articles of Agreement.
• The assessment includes a range of figures and tables that provide detailed insights into macrofinancial conditions, systemic risk analysis, and financial sector oversight.
• The report emphasizes the need for enhanced coordination between the ACPR, AMF, and ECB, as well as the importance of addressing vulnerabilities through proactive policy measures.

Conclusion

The French financial system is more resilient than in 2012 but still faces significant challenges. The report underscores the importance of macroprudential tools, liquidity management, and enhanced oversight of financial conglomerates to ensure stability and mitigate risks. The recommendations aim to strengthen the system's ability to withstand shocks and improve its resilience in the context of evolving macrofinancial conditions and regulatory frameworks.