where necessary, to the capital requirements related to some liquidity lines or to the securitisation rules. finally, the crisis has highlighted the need for banks to improve their analysis, measurement and management of liquidity risk. a review of how refinancing risk could arise across all of a bank ’ s business lines is a priority ; as is an analysis of how refinancing risk interacts with market risk, credit risk and concentration risk. the committee of european banking supervisors and the basel committee, at the global level, are currently reviewing the principles governing liquidity risk management. on a final note, i would like to add that the crisis has highlighted the need to enhance internal control systems and to improve the circulation of information about risks, especially for senior managers. the exceptional case of fraud affecting societe generale has strengthened our resolve in this matter. in france, this should lead to the amendment of regulation 97. 02 on internal control, with provisions on managing operating risk, along with specific efforts to fight fraud. this reform is connected to moves to ensure greater involvement of banks ’ highest governance bodies in monitoring their internal control systems. all these initiatives draw on the lessons learned from the past, but they are also forward - looking. their purpose is to establish the principles of risk management. these principles do not eliminate all risks, but they enhance the resilience of the system when tensions do emerge. this is the objective of the reforms, which i am sure will contribute to greater financial stability in the long run. * * * the commission bancaire therefore intends to continue its action to enhance management and control of these risks, not only within france but at the international level as well, naturally, within a european banking supervision structure that emphasises real convergence in supervisory practices. the practical implementation of supervisory colleges needs to be stepped up in order to achieve this objective. supervisory colleges are the keystone for the supervision of large cross - border groups in europe. the resolutely european thrust of our action, which is naturally in line with the international development of banking activities and of the sources of vulnerability for financial stability, will lead to the incorporation of a european convergence objective into the mandates of domestic supervisors. from my point of view, this objective will be a major motivation for the supervisory community as a whole.

1 per cent ( particularly in foreign operations, with an increase of 22 per cent compared to 2006 ), and project financing. retail banking is still a core business for french banks and it played a critical role in stabilising income sources since the beginning of the financial crisis. origination of new loans for non - financial agents remained high. proper pricing of risks according to the credit quality of borrowers is therefore a key issue in france ’ s highly competitive lending market. by contrast, corporate and investment banking activities had a broadly negative impact on earnings, due to the combined effects of asset impairment and falling profits. losses from asset management vary more significantly from one institution to another. what can we learn from the major banks ’ first quarter earnings in 2008? earnings are obviously following the same trend as in 2007 and reflect the persistent effects of the risks associated with the subprime crisis, with valuation losses on assets and higher risk - related costs. a compound indicator, such as roe shows a decline in profitability, but it still stands at an average of 14 per cent, compared to 18. 9 per cent for the three largest banking groups in the first quarter of 2007. on this point, i would like to put this decline into context. it follows several years of exceptional profits, which raised questions about their sustainability. despite declining income, the french banking system is still financially sound : the tier 1 solvency ratio based on original own funds stood at an average of 7. 1 per cent for the three largest banking groups at the end of 2007, much higher than the minimum ratio of 4 per cent set under pillar 1 of the basel ii accord. banks increased their solvency ratios in the first quarter of 2008 and the commission bancaire attaches a great deal of importance to this effort. the benefits of business diversification, the effectiveness of the measures taken to limit risk exposures and the satisfactory capital levels have also enabled the major banking groups to remain highly rated by the leading international agencies. 2. the current economic situation calls for vigilance nonetheless, since banks must be ready to cope with new risks that may occur at any time. the sources of risks related to the crisis are being closely monitored, but the french banking system, like any other, cannot be fully protected against new negative developments stemming from the crisis. in today ’ s globalised financial markets, the contagion of financial turmoil can spread through many channels. therefore, extreme vigilance is called for. for example, let