or for the most part, on financial markets. our banks have a sound and recurrent source of future profits. this is a vital asset in periods when it is impossible to raise capital by issuing shares on the market. • lastly, the “ manoeuvrability ” of our banks remains excellent, as the recent takeover of fortis ’ assets by bnp paribas shows. • it should be recalled that almost all money - market mutual funds ( sicav de tresorerie ) are offered by major banks. everything that the president of the republic has said and everything that i have just said about the soundness of our banks also applies to these funds. credit developments are the subject of much focus in the current period. a cautious and balanced approach is required in their analysis and excessive optimism or pessimism should be avoided. the main facts can be resumed as follows : • as a snapshot, credit growth remains strong ( over 10 % per year for companies and 9 % for households ). but this partly reflects the weight of past decisions and specific factors relating to the reintermediation, by banks, of previously securitised loans. • all surveys point to a tightening of credit standards going forward. “ tightening ” does not mean that credit will dry up, but rather that it will be more expensive and more selective. banks are gradually passing on to their customers the increase in the cost of financing that they incur. • we are closely monitoring this development that, at present, does not appear to be, in itself, a threat to growth. indeed, the recent period had been characterised by an extremely high credit growth rate. as you know, the government has implemented measures to facilitate the financing of smes. to conclude, in the longer term, and in accordance with the guidelines laid down by european governments on 4 and 12 october 2008, i believe that it would be useful to revisit the foundations of our financial regulation. this should be done without haste, but no stone should be left unturned. we must be willing to address all the questions and challenges that this crisis has raised. these include the role of credit ratings agencies, the management of risk, market infrastructures, the scope of financial regulation and the question of remuneration. as regards the latter, we should not seek to over - regulate or punish, but rather to instil a sense of responsibility. pay structures should not encourage short - termism or, as was the case

the following principles : • taking decisive action to prevent the failure of financial institutions ; • taking all necessary steps to unfreeze credit and money markets ; • ensuring that banks and other major financial intermediaries can raise capital as needed ; • ensuring that national deposit insurance and guarantee programmes are robust ; • ensuring accurate valuation and transparent disclosure of assets, as well as consistent implementation of high quality accounting standards. thanks, in particular, to france ’ s leading role in discussions, europe is organising itself. the meeting of the heads of state and government of the euro area, held at the elysee palace on 12 october, with the participation of the president of the ecb, provides europe with a structured and coherent framework : • possibility of recapitalising banks ; • guaranteeing new medium - term bank debt ( 1 - 5 years ), via, in france, a eur 320 billion funding vehicle ; • revisiting the accounting rules, with the recent reforms of the iasb – international accounting standard - setters – and introducing greater flexibility in mark - to - market accounting rules, allowing assets for which there is no longer a market to be valued at amortised historical cost. moreover, the european investment bank will be mobilised to support european smes. lastly, long - term discussions will commence on the best way to regulate finance and how it may better serve economic development. 3. the position of french banks and credit our banks are not immune to the crisis. they have direct exposures, in particular through us monoline insurers. they have had to make sometimes substantial write - downs. they are also impacted indirectly by the seizing up of certain markets and the rise in their refinancing costs. that said, our banks are sound and profitable. it is worth recalling four facts that, in the current period of turmoil, are often overlooked : • the solvency ratios of french banks are high, and much higher than the minima imposed by the prudential regulation. • our banks, overall, remain profitable : over eur 7 billion in the first half of the year. we ensure, contrary to certain rumours, that these earnings are reported using the strictest standards. in all probability, this trend – of lower but positive profits – should continue for the rest of this year. • one reason for this profitability is that our banks have regular sources of income. they are universal banks. this sets them apart from banks in some other countries that depend exclusively,