sound financing of the french economy during a slowdown in other countries, banking sector profitability and profits are even higher than those currently being observed in france. indeed, these record profits are attracting criticism and windfall taxes elsewhere : i believe it is fortunate that this is not the case in france. however, the soundness of the banking system must be accompanied by the effective financing of our economy. 2. 1 businesses are still well financed as far as businesses ( including smes and vses ) are concerned, access to credit appears to be relatively well preserved. driven by investment loans, outstanding loans are continuing to grow for all sizes of business at a rate that is gradually slowing down ( 3. 0 % year - on - year to the end of september ), reflecting lower demand for credit from non - financial corporations. compared with our european neighbours, access to bank loans also continues to be more favourable in france where interest rates on new loans are lower on average ( 4. 6 % in france in september, compared with 5. 05 % in the euro area ) ; the share of approved loans has remained stable – both for financing investment and cash flow – according to our quarterly business survey published yesterday evening. page 8 of 12 credit mediation, which is available in all of the banque de france ’ s departmental branches, is still not very widely used, with an average of around a hundred requests per month over the past year. nevertheless, the steady slowdown in outstanding business loans means that we must remain vigilant. 2. 2 housing loans are a more sensitive area housing loans are a more sensitive area. new housing loans ( excluding renegotiations ) fell to a low of eur 9. 2 billion in september, a level almost identical to the monthly average recorded prior to 2015 and the introduction of ultra - accommodative monetary policies. this slowdown in new housing loans is only natural given our position in the interest rate cycle. after making massive use of housing loans up to mid - 2022, french households are now adopting a wait - and - see attitude in the face of higher interest rates - even though they remain lower than in neighbouring european countries - and, correlatively, of house prices that have only just begun to come down since the start of the year at national level. page 9 of 12 however, aside from a wait - and - see approach, there is a big question mark over supply, and the fact that " banks appear to have stopped

through private financial institutions based on the government's support and the bank's fund provisioning totals about 52 trillion yen. these loans will have a significantly positive effect since they serve as a support for firms that are having difficulties raising funds. on the other hand, these effectively interest - free loans are equivalent to almost 20 percent of the amount outstanding of loans to small and mediumsized firms provided by private financial institutions. therefore, interest - free and unsecured loans currently provided to support corporate financing might put downward pressure on spreads on the ordinary loans that will be made, even after the impact of covid - 19 subsides. in this case, the narrowing of lending margins would become more prolonged. the second factor inducing a decline in financial institutions'profitability is the decrease in investment income. as financial institutions have fulfilled the functioning of financial intermediation by responding to the need for support of financing, mainly of firms, the amount outstanding of bank lending rose significantly for july, by 6. 4 percent from the previous year. meanwhile, the annual growth rate in the amount outstanding of deposits was higher, marking 8. 3 percent, due mainly to an expansion in fiscal spending. in terms of value, while lending increased by 30 trillion yen, deposits rose by 60 trillion yen, exceeding the increase in lending by 30 trillion yen. financial institutions invest such excess deposits in, for example, treasury discount bills ( t - bills ) or current account deposits at the bank, but their estimated by using financial institutions'average contract interest rates on new loans and discounts ( 0. 78 percent ) and overhead cost ratios in the domestic business sector ( 0. 80 percent ; compiled by the regional banks association of japan ). profitability declines because the yields on t - bills and the interest rates on these deposits are extremely low. the third factor is the increase in credit costs. as financial institutions provide active support for firms whose financial positions have deteriorated due to covid - 19, a certain proportion of their loans could become nonperforming, leading to a rise in credit costs. the increase in these costs does not so far seem to be as serious as that observed after the global financial crisis ( gfc ). however, if the impact of covid - 19 expands, along with potential second or third waves, credit costs could increase to almost the same level seen at the time of the gfc. with the narrowing of lending margins and further declines in jgb yields, financial institutions have actively extended