christian noyer : possible ways of improving the process of rating speech by mr christian noyer, governor of the bank of france, at the symposium on financial ratings, organised by the cercle france - ameriques, paris, 12 december 2007. * * * ladies and gentlemen, it is a great pleasure and honour for me to speak at this conference organised by the cercle france - ameriques and close the rich and lively round table discussions and the previous speeches on rating agencies and the financial crisis. in the current state of turmoil, rating agencies have attracted a large amount of criticism. my intention is not to enter into this discussion, but rather to make a few remarks on the rating process itself and the possible ways of improving it, in the light of the recent events. preliminary remarks an essential function of financial markets is to collect and process information. this information is used to assess the risk and return on the various assets, and therefore to help price discovery and more generally to take investment and financing decisions. however, the process by which this information is factored into prices is complex. economic agents do not all have the same access to data and processing capacities. there is therefore an asymmetry of information on the markets, which is at the root of well known market failures : adverse selection ( whereby lower quality investments are more readily financed than “ good ” projects ) and moral hazard ( which encourages investors to take excessive risks ). but more importantly, gathering and processing this information is costly. there is no incentive for the various investors to incur these costs if they believe that others will do it and thus ensure the efficiency of the market. when banks are engaged in financial intermediation, they gather and process the information concerning their borrowers through their customer relations. bank intermediation is therefore a means of overcoming the problems of the asymmetry of information and its accessibility. however, on a securitised market, where borrowers are directly in contact with lenders, this solution does not exist. the rating system is an answer to the problem, as it enables all players to have access to simple, clear and concise information on the credit risk attached to the various classes and categories of financial instruments. the rating activity has expanded in parallel with that of bond markets. all major issuers are now rated by one or more rating agencies. for them it is a sine qua non condition for widening their investor base. the rating system goes hand in hand with the development

agnes benassy - quere : towards an extended policy mix speech by ms agnes benassy - quere, second deputy governor of the bank of france, at the european university institute, robert schumann centre, economic and monetary union lab seminar, florence, 22 march 2024. * * * it is a great pleasure for me to be here in florence, and i would like to thank marco buti and giancarlo corsetti for giving me the opportunity to share some thoughts about the policy mix – a topic they know very well. since we are here to celebrate the emu lab, i will focus on the european policy mix. i will first review how it has actually worked since the inception of the economic and monetary union ( i ) ; then, i will discuss the complexification but also enrichment of the policy mix over time ( ii ). i would like to convince you that the policy mix is more than what you think. i. the policy mix since maastricht as you all know, the euro area's policy mix was born in maastricht, netherlands, in 1992. hence it was maybe not a coincidence that the maastricht treaty de facto endorsed the instructions of a dutch economist, jan tinbergen. " one objective, one instrument " : the single monetary policy was put in place to ensure price stability at the level of the euro area, while fiscal policies were assigned to output stabilisation at the level of each member state. this framework implicitly assumed the absence of supply shocks. with only demand shocks, there would be no trade - off between price stability and output stability, whether at the euro area or at the member state level. the set - up was clear, simple and straightforward. it was assumed that during economic booms, governments would accumulate buffers that they would subsequently spend to cushion inevitable crises. in this way, they would stabilise their economies while avoiding running excessive deficits. as argued by my co - authors elga bartsch, giancarlo corsetti, xavier debrun and myself in a geneva report in 2020, i the credibility of fiscal policy reinforces that of monetary policy, and vice versa. indeed, fiscal discipline enhances the effectiveness of monetary policy by reinforcing the independence of the european central bank. and reciprocally, a credible central bank delivers price stability at low levels of real interest rates, reducing the risks of snowball effects for sovereign debts on several