to the challenge of their historical mission, setting an ambitious agenda for global cooperation. the opening words of the communique from the london summit still merit repeating today : “ a global crisis requires a global solution [ … ]. we believe that the only sure foundation for sustainable globalisation and rising prosperity for all is an open world 2 / 7 bis central bankers'speeches economy based on market principles, effective regulation and strong global institutions. we have today therefore pledged to do whatever is necessary to : restore confidence, growth and jobs ; repair the financial system to restore lending ; strengthen financial regulation to rebuild trust. " this unprecedented regulatory effort concerned all financial system participants. four main objectives were set : ( i ) to make financial institutions more “ resilient ", that is increase their soundness and their ability to withstand crises ; ( ii ) to put an end to the problem of “ too - big - to - fail ” institutions – which benefited from an implicit guarantee that they would be bailed out by the government ; ( iii ) to make over - the - counter derivatives markets more secure, notably through central clearing ; and ( iv ) to transform unregulated market activities – shadow banking – into a sound form of market financing. at the global level, responsibility for the operational implementation of these objectives was entrusted to the financial stability board, and to the basel committee on which both the banque de france and acpr are active. since 2010, significant, albeit uneven, progress has been made on all four g20 objectives. i shall focus here on the first of these : financial institutions are now more resilient. the basel iii accords, adopted in 2010, have increased both the quantity and quality of banking sector own funds ; in addition, they ensure better account is now taken of the diverse risks to which banks are exposed, thanks to the introduction of a leverage ratio – measured as a share of total unweighted assets – and two new liquidity ratios for bank cash levels. requirements have also been increased in the insurance sector, with the entry into force of the new solvency ii regulatory framework in europe at the start of 2016. at the end of 2016, french insurance firms subject to solvency ii had a solvency capital ratio of 222 %, well in excess of the required 100 %. these various tools, known as microprudential as they are intended to reduce the individual risks incurred by financial institutions, have been supplemented with a set of socalled macroprude

the new approach to financial regulation. another key plank concerns the macro - prudential approach to regulation. the legislation will establish the financial policy committee ( fpc ), charged with the primary objective of identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the uk financial system. in june, the chancellor announced that the government would amend the bill to give the fpc a secondary objective so that subject to being content on the first objective, it should support the economic policy of the government, including its objectives for growth and employment. currently, the fpc is acting in an interim capacity to undertake, as far as possible, the future statutory fpc ’ s macro - prudential role. macro - prudential regulation is focused on protecting the financial system as a whole. in a very “ big picture ” sense, there is nothing new about this activity. the problems of the last five years have emphasised the close links between the health and behaviour of banks and the condition of the economy. this is a lesson of history, and one that should not have been forgotten. but, forgotten it was. at present the fpc is pursuing two important objectives : seeking to increase the resilience of the uk banking system, including to the threats emanating from the euro areas ; and, subject to being content with the path towards greater resilience, supporting the creation of credit in the uk economy. i am in no doubt that if banks take reasonable steps to enhance their resilience, they will be better placed to sustain the availability of credit to the economy by lowering their cost of funding and reducing their vulnerability to unanticipated events. macro - prudential regulation takes a system - wide view of the risks we face and the buffers of capital and liquidity that banks should hold against possible stress events. this is very clearly the resilience objective for the system, to which the fpc attaches great weight. banks in the uk have made substantial progress over the last four years in building that resilience, from of course a very low base. we believe that there is further to go on capital, and the fpc has set this position out, but in doing so we should not forget the distance that has been travelled. we should also remember that more capital cannot be conjured from thin air, particularly as there are at present quite severe constraints around the rate of return earned by banks