Actual membership in the Banking Union will further deepen our partnership with the ECB, the Single Supervisory Mechanism and the Single Resolution Mechanism. Regarding supervision, according to the European Central Bank’s rules the ECB will supervise the biggest banks in Bulgaria and the BNB’s experts will participate in joint supervisory teams. This joint work will cover the off-site supervision aimed at on-going risk monitoring and assessment and also the on-site examinations in banks operating in Bulgaria. The other banks in Bulgaria will remain under the BNB’s supervision, but supervisory information about them will be exchanged with the ECB continuously. The joint work with the ECB will also cover many spheres of the practical organisation and operation of banking supervision. For example, the BNB’s experts will have direct access to the overall analytical expertise in the Single Supervisory Mechanism. Historical experience shows that the accession to this mechanism generates new synergy between the national competent authorities and the ECB, and it is a two-way process. Along with joining the Single Supervisory Mechanism, Bulgaria will also join the Single Resolution Mechanism. This would imply distribution of responsibilities and powers between the Single Resolution Board and the BNB as the national authority for resolution of credit institutions. Bulgaria’s legal framework for joining the Single Resolution Mechanism is already in place. The preparation for joining the Single Resolution Fund, including for calculating banks’ contributions to the Fund, and the preparation of the bank resolution planning process after joining the Single Resolution Mechanism are very advanced.

The direct exposure of the French financial sector to Russian assets is contained: the liabilities of French banks vis-à-vis Russian banks account for less than 1% of their total international liabilities, and French insurers’ investments in Russian securities amount to just under EUR 500 million. The withdrawal from investments in Russia was admittedly tricky, but orderly. The conflict could have more of an impact via indirect channels, including the strong tensions in global commodity markets. For the time being, the consequences of these market movements on the French banking sector have been kept under  Page 7 of 8 control. However, the ACPR remains fully mobilised in monitoring any potential financial risks that might emerge. More broadly, the macroeconomic and financial environment has evolved significantly since last year, and the Ukraine conflict has exacerbated the inflationary pressures that were already visible at the end of 2021: we are naturally keeping a very close eye on this, like our fellow citizens. The latest inflation figures for May, for France and the other countries, confirm a rise that we were already expecting, and the need for a gradual but resolute process of normalisation. We shall take a decision at our Governing Council meeting next week, which will be in line with recent comments by the President of the ECB. After having for years listened to complaints about how low interest rates were weighing on banks and insurers, we might have expected few to voice concerns now about a rise in rates.