Opinion of the European Central Bank of 26 April 2024 on the legal framework for the High Council for Financial Stability (CON/2024/11)
Date: 2024-04-26
Institutions: European Central Bank
Subjects: financial stability

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 April 2024  

on the legal framework for the High Council for Financial Stability 

(CON/2024/11) 

Introduction and legal basis 

On 23 January 2024, a draft law related to the French Haut Conseil de Stabilité financière (HCSF, High 

Council for Financial Stability) (hereinafter the ‘draft law’), which modifies Articles L.631-2 et seq. of the 

Code monétaire et financier1 (CMF, Monetary and Financial Code), the current wording of which results 

from the 2013 Law on the separation and regulation of banking activities 2, was presented for consideration 

by the French National Assembly. The draft law was amended by the Finance Committee of the French 

National Assembly on 10 April 2024. Although the draft law3 provides that the consultation of the European 

Central  Bank  (ECB)  under  Article  127(4)  of  the  Treaty  on  the  Functioning  of  the  European  Union  is  a 

requirement for the second article of the draft law to enter into force, the ECB has not, as of the time of 

adoption of this opinion, been consulted by the French authorities on the draft law. 

The ECB has decided to deliver an own initiative opinion on the draft law. The ECB’s competence to deliver 

an opinion is based on Article 127(4), second paragraph, and Article 282(5) of the Treaty, as the draft law 

relates to the Banque de France and to the European System of Central Banks’ task to contribute to the 

smooth conduct of policies relating to the stability of financial system pursuant to Article 127(5) of the Treaty. 

In  accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central 

Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  The draft law modifies the CMF4 with the intention of overhauling the legal framework governing the 

activities of the HCSF, which was first established in 2010, and then significantly revamped in 2013.  

1.2 

In  2010,  the  Law  on  banking  and  financial  regulation5  established  the  Conseil  de  la  régulation 

financière et du risque systémique (Corefris, Council  of Financial Regulation and Systemic Risk). 

This was composed of the Minister for the Economy, who also chaired it, the Governor of the Banque 

de  France,  the  Vice-President  of  the  Autorité  de  contrôle  prudentiel  et  de  résolution  (ACPR, 

Prudential  Supervision  and  Resolution  Authority),  the  President  of  the  Autorité  des  marchés 

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The draft law proposes to amend Articles L.631-2 and L.631-2-1 of the CMF. 

Loi n° 2013-672 du 26 juillet 2013 de séparation et de régulation des activités bancaires, JORF n° 0173 du 27 juillet 
2013, texte n° 1. 

See Article 2, II, of the draft law. 
The draft law proposes to amend Articles L.631-2 and L.631-2-1 of the CMF. 
Loi n° 2010-1249 du 22 octobre 2010 de régulation bancaire et financière, JORF n° 0247 du 23 octobre 2010, texte 
n° 1. 

 
 
 
 
 
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financiers  (Financial  Markets  Authority),  the  President  of  the  Autorité  des  normes  comptables 

(Accounting  Standards  Authority)  and  three  qualified  individuals  appointed  for  their  expertise  in 

monetary, financial or economic matters by the Minister for the Economy. At a time when discussions 

at the Basel Committee on Banking Supervision on macroprudential instruments were still ongoing 

and  Union  legislation  was  yet  to  introduce  such  an  instrument,  the  main  task  of  Corefris  was  to 

monitor  financial  stability,  especially  systemic  risks,  and  foster  cooperation  between  the  different 

institutions represented. 

1.3 

In  2013,  while  unchanged  in  its  composition  and  governance  (apart  from  the  nomination  of  the 

qualified  individuals  now  resting  with  the  Chairpersons  of  both  chambers  of  Parliament  and  the 

Minister,  each  of  them  nominating  one  qualified  individual),  the  legal  framework  governing  the 

activities of Corefris was substantially overhauled, in line with Union law6. Corefris became the HCSF 

and was granted six tasks: (1) to foster cooperation between the different institutions represented7; 

(2) to analyse systemic risks taking into account the  opinions and recommendations  of  European 

authorities 8; (3) to issue opinions and recommendations9; (4) to adopt legally binding measures to 

address  systemic  risks10;  (5)  to  recommend  to  the  relevant  European  authorities  the  adoption  of 

measures preventing any systemic risk to the financial stability of France11; and (6) to facilitate the 

cooperation of its members with a view to contributing to the adoption of European or international 

norms 12.  

1.4  The draft law intends to modify both the composition and the legal framework of the HCSF. According 

to  the  explanatory  note  to  the  draft  law,  the  aim  pursued  is  twofold.  First,  the  draft  law  aims  at 

increasing  the  democratic  aspect  in  the  adoption  of  the  HCSF’s  decisions  by  changing  the 

composition  of  the  HCSF.  Second,  the  draft  law  intends  to  constrain  the  HCSF’s  power  to  adopt 

legally  binding  measures  setting  the  conditions  for  granting  credit  with  a  view  to  preventing  the 

emergence  of  excessive  upward  movements  in  the  prices  of  assets  of  any  kind  or  excessive 

indebtedness on the part of economic agents (hereinafter ‘borrower-based measures’).    

2. 

Consultation of ECB by national authorities regarding draft legislative provisions  

2.1  As noted above, the draft law sets out that the consultation of the ECB under Article 127(4) of the 

Treaty is a requirement for the second article of the draft law to enter into force. Under Articles 127(4) 

and  282(5)  of  the  Treaty,  the  ECB  must  be  consulted  by  national  authorities  regarding  any  draft 

legislative provision in its fields of competence, but within the limits and under the conditions set out 

in Council Decision 98/415/EC13. In accordance with Article 4 of Decision 98/415/EC, each Member 

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Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit 
institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC 
and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338). 

Article L.631-2-1, 1°, of the CMF. 
Article L.631-2-1, 2°, of the CMF. 

Article L.631-2-1, 3°, of the CMF. 
Article L.631-2-1, 4°, 4° bis, 4° ter, 5°, 5° bis and 5° ter, of the CMF. 

Article L.631-2-1, 6°, of the CMF. 
Article L.631-2-1, 7°, of the CMF. 
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

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State must ensure that the ECB is consulted at an appropriate stage enabling the authority initiating 

the draft legislative provision to take into consideration the ECB’s opinion before taking its decision 

on the substance.  

2.2  Based on this, the ECB should be consulted not only in respect of a single article, but on the draft 

law in its entirety prior to its adoption14.  

3. 

Changes to the nomination and appointment of the members of the HCSF  

3.1  Composition of the HCSF 

3.1.1  The draft law introduces changes to the nomination and appointment of the members of the HCSF. 

To that end the draft law provides for an increase in the number of members sitting in the HCSF from 

eight to ten. These two new members to be appointed are both members of the French Parliament, 

respectively a member of the National Assembly and a member of the Senate.  

3.1.2  In this respect, the draft law also requires that, following the increase in appointed members, the two 

members of Parliament to be appointed are chosen so that gender balance is achieved at the HCSF 

level; the current arrangement provides that the three qualified representatives are chosen so that 

the overall composition of the HCSF tends to be gender balanced.  

3.1.3  In its previous opinions on macroprudential oversight 15 the ECB expressed support for the design of 

effective macroprudential policy frameworks within Member States, in line with the guiding principles 

set  out  in  Recommendation  ESRB/2011/3  of  the  European  Systemic  Risk  Board16.  It  should  be 

highlighted that the European Systemic Risk Board (ESRB) recommends that national central banks 

should have a leading role in macroprudential oversight because of their expertise and their existing 

responsibilities in the area of financial stability. The ECB takes note that this principle is also indicated 

by  Regulation  (EU)  No  1092/2010  of  the  European  Parliament  and  of  the  Council17.  In  addition, 

Recommendation  ESRB/2011/3  also  recommends  that,  in  the  pursuit  of  its  objective,  the 

macroprudential  authority  is  as  a  minimum  operationally  independent,  in  particular  from  political 

bodies. This includes that organisational and financial arrangements do not jeopardise the conduct 

of  macroprudential  policy.  In  this  regard,  the  ESRB,  in  its  2014  Compliance  Report  on  the 

implementation of Recommendation 2011/3, considered that France was only partially compliant with 

regard to Recommendation E on independence, as the government was deemed to play a leading 

role in the macroprudential authority 18. 

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18  

See  paragraph  2.1  of  Opinion  CON/2024/5.  All  ECB  opinions  are  published  on  EUR-Lex.  See  also  Guide  to 
consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative  provisions,  pp.  18-20, 
available on the ECB’s website at www.ecb.europa.eu. 

See, for example, paragraph 2.1 of Opinion CON/2013/82 and paragraph 2.1 of Opinion CON/2022/8.  

Recommendation ESRB/2011/3 of the European Systemic Risk Board of 22 December 2011 on the macro-prudential 
mandate of national authorities (OJ C 41, 14.2.2012, p. 1). 

Recital 24 of Regulation (EU) No 1092/2010 on European Union macro-prudential oversight of the financial system 
and establishing a European Systemic Board (OJ L 331, 15.12.2010, p. 1). 

On the other hand, the power conferred on the Governor of the Banque de France to propose measures was assessed 
as a positive organisational feature of the HCSF. See European Systemic Risk Board, ESRB Recommendation on the 
macro-prudential mandate of national authorities (ESRB/2011/3) Follow-up Report – Overall assessment, June 2014, 
available on the ESRB’s website at www.esrb.europa.eu. 

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3.1.4  The simultaneous increase in the number of members and the fact that these new members with 

voting rights are members of Parliament alters the composition of the HCSF. The number of HCSF 

members would increase to ten, with members who are politically appointed or representing political 

bodies  now  due  to  increase  to  six 19.  Consequently,  in  its  current  form,  the  draft  law  risks  further 

conflict with the principles sets out in ESRB Recommendation 2011/3, which recommends that the 

macroprudential  authority  should  be  as  a  minimum  operationally  independent,  in  particular  from 

political bodies 20. This risk of conflict is potentially reinforced by the fact that to break a tie among 

the members of the HCSF during a vote the Minister for the Economy holds the casting vote21. These 

changes de facto result in a dilution of the representation of technical bodies in the HCSF, including, 

but not limited to, the Banque de France and the ACPR. 

3.1.5  In the light of the above, the ECB invites the French legislator to further reflect on how best to maintain 

the balance of powers and responsibilities within the HCSF. 

3.2  Gender-balanced representation 

The  ECB  takes  note  of  and  welcomes  the  arrangements  to  further  strengthen  gender-balanced 

representation in the HCSF.  

3.3   Hearing before the Parliament of the qualified candidates 

3.3.1  The draft law provides that the three qualified individuals sitting on the HCSF are to be appointed 

after being heard by the Finance Committees of the National Assembly and the Senate. 

3.3.2  The  ECB  understands  that  the  hearing  of  the  nominated  qualified  candidates  before  the  French 

Parliament does not amount to a formal vote of approbation from the Parliament in respect of the 

candidates.  This  does  not  constitute  a  material  change  in  the  procedure  to  appoint  the  qualified 

candidates. The choice to appoint these qualified candidates to the HCSF continues to reflect the 

sole decision of, respectively, the President of the National Assembly, the President of the Senate 

and the Minister for the Economy. 

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Amendments to the framework for setting borrower-based measures in France 

4.1  Summary of amendments 

4.1.1  The draft law introduces substantial changes to the powers enjoyed by the HCSF with the aim of 

limiting the application of borrower-based measures 22. In this regard, the draft law also introduces a 

three-month sunset clause requiring the HCSF to periodically review and consult on a HCSF decision 
regarding a borrower-based measure23. Moreover, it makes explicit that the HCSF, upon a proposal 

made by the Governor of the Banque de France, can set exemptions in respect of borrower-based 

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Under the draft law, the HCSF is composed of six members who are either representatives of, or appointed by, political 
authorities: three qualified individuals (appointed, as has been the case since 2013, respectively by the Minister for 
the Economy, the President of the Senate and the President of the National Assembly), the Minister for the Economy 
and two members of the French Parliament.20   See Section I of Recommendation ESRB/2011/3. 
See Section I of Recommendation ESRB/2011/3. 
Article R.631-8, II, of the CMF. 
Adopted under Article L.631-2-1, 5°, of the CMF. 
In Article L.631-2-1, 5°, 3rd sentence, of the CMF. 

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measures as part of its decisions on their adoption. Finally, the draft law amends the rules governing 

the publication of proposals made by the Governor to the HCSF to adopt borrower-based measures.  

4.1.2  The  ECB  recalls  its  support  for  the  implementation  of  a  legislative  framework  for  borrower-based 

measures  in  all  euro  area  Member  States,  which  are  known  to  be  effective  in  addressing 

macroprudential  and  systemic  risks 24.  The  availability  of  a  comprehensive  set  of  borrower-based 

measures,  including  income-based  measures,  enables  the  HCSF  to  respond  in  a  flexible  and 

proportionate way to potential risks to financial stability.  

4.1.3  The ECB understands that under the draft law, any proposal on borrower-based measures would 

have to be made by the Governor of the Banque de France, and that only a formal proposal from the 

Governor would be put to a vote among the members of the HCSF. The ECB also understands that 

the Governor of the Banque de France also retains the power to define in any such proposal the 

exemptions  for  borrower-based  measures.  The  ECB  supports  the  central  role  assigned  to  the 

Governor of the Banque de France to propose and define the conditions under which borrower-based 

measures are to be adopted and then implemented. 

4.2  The sunset clause in respect of the borrower-based measures  

4.2.1  As  noted  in  paragraph  4.1.1,  the  draft  law  adds  a  sunset  clause  under  which  borrower-based 

measures, including any exemptions in respect of such measures, are in force for up to three months 

and are reassessed by the HCSF after consulting the Comité  consultatif  du  secteur 

financier 

(CCSF, Consultative Committee for the Financial Sector), which is a consultative body composed of 

financial services stakeholders, before potentially being renewed. In this regard, the ECB notes that 

the consultation of the CCSF may further impact upon the effectiveness and independence of the 

HCSF’s decision-making process, as the members of such consultative body are appointed by the 

Minister for the Economy, among representatives of the financial sector and consumers of financial 

services, and also include a member of the National Assembly and a member of the Senate. The 

ECB further notes that the very limited timeframe during which borrower-based measures are in force 

would severely jeopardise their effectiveness in tackling risks to financial stability.  

4.2.2  Borrower-based measures are macroprudential limits to lending standards, such as debt-to-service-

income, debt-to-income and loan-to-value ratios, as well as maturity and amortisation requirements, 

that  generally  apply  only  to  newly  originated  loans.  The  availability  of  a  comprehensive  set  of 

borrower-based  measures,  including  income-based  measures,  enables  the  relevant  authorities  to 

respond  in  a  flexible  and  proportionate  way  to  potential  risks  to  financial  stability.  Against  this 

background, it should be recalled that including exemptions in respect of borrower-based measures 

is a common practice in their design. The calibration of borrower-based measures, including possible 

exemptions,  should  be  informed  by  thorough  technical  impact  assessments  conducted  by  the 
macroprudential authorities 25. A limited period of applicability would not allow for a proper technical 

assessment  of  borrower-based  measures,  potentially  hindering  the  achievement  of  their  financial 

stability objectives, namely increasing the resilience of both borrowers and banks.  

24  

25  

See  paragraph  3.2  of  Opinion  CON/2018/9,  paragraph  2.1  of  Opinion  CON/2019/34,  paragraph  2.3  of  Opinion 
CON/2020/1 and paragraph 3.1 of Opinion CON/2022/8. 

Under Article L.631-2-1, 5°, of the CMF. 

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4.2.3  The very strict timeframe of three months, coupled with a cumbersome extension procedure, would 

jeopardise the effective implementation of borrower-based measures. 

4.2.4  These  characteristics  explain  why  in  other  Union  jurisdictions  the  review  of  borrower-based 

measures,  when  it  is  required,  takes  place  after  a  longer  period  of  time.  For  example,  in  Austria, 

borrower-based  measures  are  effective  for  a  period  of  up  to  three  years 26.  In  Ireland,  the 

macroprudential authority in general considers borrower-based measures to be permanent in nature 

and their calibration to be largely driven by structural factors and does not therefore envisage regular 

calibration changes. In this respect, structural factors are seen as slow-moving features that play a 

role in determining, for example, the magnitude of risks to affordability or a sustainable level of house 

prices relative to incomes 27. 

4.2.5  In the light of the above, the ECB suggests that any sunset clause for borrower-based measures 

should extend over a sufficiently long period of time.  

4.3  Publication of proposals made by the Governor of the Banque de France to adopt legally binding 

measures 

4.3.1  The  draft  law  introduces  new  requirements  regarding  the  publication  of  proposals  made  by  the 

Governor of the Banque de France under the relevant provisions of the CMF28. The ECB understands 

that the draft law requires the publication of all proposals made by the Governor of the Banque de 

France pertaining to borrower-based measures 29, while it remains at the discretion of the Governor 

that proposals concerning other legally binding macroprudential measures may be published. 

4.3.2  The ECB acknowledges the intention of this amendment to enhance transparency in the work of the 

HCSF but considers that the introduction of what amounts to a dual regime regarding publication of 

proposals  made  by  the  Governor  of  the  Banque  de  France  may  have  detrimental  effects.  The 

differentiated treatment of proposals 30 increases the constraints on the actions of the Governor and 

may ultimately affect the reputation of the Banque de France by requiring the publication of market 

sensitive proposals in circumstances in which it may not always be appropriate to do so. 

4.3.3  In  addition,  the  potential  application  of  a  differentiated  regime  of  transparency  suggests  that  the 

proposals made  by the Governor of the  Banque de France are not equally considered. The  ECB 

therefore  recommends  aligning  the  regime  governing  the  disclosure  of  the  Governor’s  proposals 

regarding borrower-based measures 31 with the provision currently governing the publication of the 

other proposals. At the very least, the ECB suggests including a provision giving the Governor the 

right to veto the publication of any proposals where this is considered necessary to preserve financial 

stability. 

4.3.4  Should the provisions of the draft law become subject to further amendments in the course of the 

parliamentary process, and should these amendments substantially alter the draft law compared to 

See Article 23h of the Austrian Banking Act. 

26  
27        See  Central  Bank  of  Ireland,  The  Central  Bank’s  framework  for  the  macroprudential  mortgage  measures  (October 

2022), p. 22. 
See Article L.631-2-1, 4°, 4° bis, 4° ter, 5°, 5° bis and 5° ter, of the CMF. 
See Article L.631-2-1, 5°, of the CMF. 
Under Article L.631-2-1, 5°, and under Article L.631-2-1, 4°, 4° bis, 4° ter, 5° bis and 5° ter, of the CMF. 
Under Article L.631-2-1, 5°, of the CMF. 

28  
29  
30  
31  

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the version on which the ECB expressed its opinion, the ECB would need to be consulted on these 

amendments 32. 

ECB-PUBLIC 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 26 April 2024. 

[signed] 

The President of the ECB 

Christine LAGARDE 

32  

See, for example, paragraph 3.4 of Opinion CON/2015/28. 

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