francois villeroy de galhau : addressing brexit, and unlocking europe ’ s investment potential welcome address by mr francois villeroy de galhau, governor of the bank of france, at the paris europlace international financial forum, paris, 6 july 2016. * * * welcome to paris! it is a pleasure for me to be here today, and to share with you our responses to the new disruptive challenges facing europe. brexit is certainly a new one : the decision has serious consequences, especially for the united kingdom. and obviously, europe is at a crossroads. but let me just stress that this is nothing new. i ’ ve said it before, notably in a joint article with jens weidmann last february. brexit is not a game - changer, but it does highlight the need to give renewed impetus to the european project. it also reminds us what finance is for : achieving the best balance between savings and investment. how this is done is still more important than where it is done ; but there is clearly a link between the two. before i share my views on the way forward for unlocking europe ’ s investment potential, let me add a few more words on brexit. 1 ) addressing the consequences of brexit obviously, brexit is bad news, first and foremost for the united kingdom. the priority right now is to deal with the fallout as smoothly as possible. for economic and monetary authorities, this means reducing uncertainty and fostering confidence, in at least three ways : – first, by managing the financial shock. financial markets experienced sharp corrections, with a significant drop of the pound, but they did not freeze. cooperation between central banks to cope with the brexit vote has been effective. we, on the ecb governing council, remain fully mobilised and determined. – second, by maintaining the proper functioning of the euro area – a collective asset belonging to 340 million people. more than two - thirds of euro area citizens support the single currency, according to the eurobarometer survey. of course, brexit will have an impact on the euro area economy, but this impact will be more modest than in the uk. brexit does not change our economic projections for this year in france : we still expect growth of at least 1. 4 %. but it is important to reduce the uncertainty over britain : the quicker, the better. – third, by preparing the new trade deal between the uk

not result in a “ significant increase in overall capital requirements ”. as they stand, the current technical proposals put forward for consultation by the basel committee do not respect this commitment : they must therefore be revisited. second, we should be careful not to oversimplify the regulatory framework and loose the risk sensitivity. adjustments to the internal models approach should not amount to imposing the standard approach on all, either explicitly, or implicitly by applying poorly calibrated “ output floors ”. * * * let me conclude with some words on the strengths of the paris financial centre itself : robust banks and insurance companies, a dynamic asset management industry, strong financial market infrastructures, a highly skilled labour force. and you can be assured of three points : 1. first, french authorities, including the banque de france, attach utmost importance to making sure paris is one of europe ’ s strongest financial centres. this is crucial for employment, for investment, as well as for the strength of the euro area economy as a whole. 2. in addition, we are already making every effort to build an innovation ecosystem : through the recent and efficient acpr - amf cooperation on fintechs ; through our support for the development of new tools – such as esni on securitization and euro gc + on repos, or our upcoming project to test interbanking information sharing processes based on blockchain technology ; and also through our partnerships with many french universities renowned for their excellence and their masters in finance. 3. and lastly, we will do more in the future to enhance the attractiveness of the paris financial centre : the government will do its part – the prime minister will talk about this later – ; the ile - de - france region and the paris city too ; and the acpr will examine in a prompt way all applications in its remit coming from financial institutions that are already licensed in another eu member state. of course, paris is not the only financial centre in the euro area, but it has everything it needs to be one of the best. it depends on us, on all of us. therefore, now more than ever, the time has come for paris europlace to take center stage. bis central bankers ’ speeches