francois villeroy de galhau : supervision of business practices opening speech by mr francois villeroy de galhau, governor of the bank of france and chairman of the autorite de controle prudentiel et de resolution ( acpr ), at the acpr conference “ supervision of business practices ”, paris, 20 november 2015. * * * ladies and gentlemen, i am delighted to welcome you today to this new conference organised by the autorite de controle prudentiel et de resolution and would like to thank you all for coming. this is an opportunity for me to tell you for the first time how important i find this type of event, where the authority that i chair explains its actions and the principles that guide it. it is also an opportunity for us all to listen to the parties concerned, on a topic that brings us together today – that of the supervision of business practices – on which i would like to put forward three ideas : ( i ) first, our supervision of business practices is important for the current mobilisation of the nation. ( ii ) second, our supervision of business practices is important for financial stability. ( iii ) lastly, our supervision of business practices must increasingly take account of developments in technology and changes in europe. our supervision of business practices is important for the current mobilisation of the nation. many lessons can be learned from the dramatic events of friday 13 november in paris and its suburbs, which requires of us a total mobilisation. faced with these barbaric acts, i wish to recall the determination of the banque de france – and of the financial sector – to participate in the fight against terrorism, by attacking its financing. many of you will attend this afternoon the presentations, introduced by mr delas, vicechairman of the acpr, on anti - money laundering and counter - terrorist financing in the insurance sector. as you know, the acpr college, together with tracfin, adopted just last week new guidelines in this area, applicable to both banks and insurance firms. i am in no doubt that the financial sector will be fully involved in their implementation ; we will ensure this together with the professionals. i would also like to recall today our determination to fully participate in the mobilisation of the nation, by contributing more broadly to economic and social cohesion, through greater banking and financial inclusion. the protection of consumers – and in particular the most vulnerable ones – is one of the components of this. financial education

and the fight against overindebtedness are also priorities to which the banque de france actively contributes. terrorism, alas, also feeds off exclusion in its different forms. ii / second, our supervision of business practices is also important for financial stability. since its creation in 2010, the acpr has been responsible for safeguarding financial stability and ensuring consumer protection. this is a major innovation, a robust step, in the wake of the 2008 crisis and the loss of confidence of customers in their financial sector in many advanced economies, sometimes due to deceptive business practices. restoring confidence is of course in the interest of all those present in this room. this means, for us, ensuring compliance with existing laws and regulations, as well as with the best practices observed or recommended by the acpr. bis central bankers ’ speeches naturally, this consumer protection task is not designed to enforce these different rules in a blanket fashion. rather, it must be done in accordance with the principles underlying these regulations and fully understanding the reality of these business practices. to sum it up in one sentence, these principles aim to balance relations between clients and professionals. this rebalancing is mainly achieved by taking account of the information asymmetry that can exist between these players. this may include rules that are specific to vulnerable clients, to a category of complex products, to the obligation to consider the interest of customers when the product is designed or in the organisation of product distribution. the reality of business practices, however, is difficult to sum up in a few words. this is where the work of acpr staff comes into play ; in the supervision as well as analysis of different data and through contact with both professionals and consumers. collecting data on business practices is a prerequisite for the acpr to guide its supervisory duties. against this backdrop, the acpr redesigned its questionnaire on business practices and consumer protection. it can now understand current market practices, as well as trends in products, services and practices. i will now talk about acpr inspections. they are firstly intended to ensure compliance with the applicable rules and to make sure that errors are corrected before they have consequences for customers. in the worst cases, such errors lead to sanctions. this approach is necessary to punish violations and useful to increase awareness in the profession. acpr inspections are not however limited to dealing with bad practices on a case - by - case basis. they also identify more general problems that call for changes in market practices or even in regulations. several