francois villeroy de galhau : europe at a crossroads – how to improve economic governance and growth performance of the eurozone? presentation by mr francois villeroy de galhau, governor of the bank of france, at the german institute for economic research – diw berlin, berlin, 8 june 2016. * * * i am delighted by the opportunity, kindly offered by diw, to share some remarks on europe here in berlin. as you may know, i have strong ties with germany. in particular, i completely share the german culture about the importance of responsibility and long - term vision. at this juncture we probably all agree on two things – and my focus today will be that these two things are closely intertwined : • monetary policy cannot be the only game in town. • although monetary union is a success, economic union remains to be built. i want to pay tribute to helmut schmidt, who said in october 2011 : “ there was a failure to set the economic rules of the game for the currency union. a powerful authority with responsibility for fiscal and economic policy was not set up. ” 1 i will first argue that monetary policy has been doing its fair share ( i ). i will then discuss the need for a “ full coordination ” of national economic policies in the euro area, and discuss what concrete progress can be made ( ii ). finally, turning to private risk - sharing in the eurozone, i will focus on the importance of building an efficient financing and investment union ( iii ). i. monetary policy is doing its duty, and has already done a lot i am well aware that some recent monetary policy decisions of the governing council are hotly debated in germany. the expression of such criticism reflects, at a minimum, the need to explain our monetary policy decisions better. however, i ’ d like to argue that our recent monetary policy decisions are very much in line with the principles of stability that german culture incarnates so well. let me elaborate on three of these principles. first, independence. the divergent inflation performance of the major industrialized economies after the collapse of the bretton woods system had a profound effect on the subsequent conduct of central banks. on the practical side, germany was seen to have navigated the so - called stagflation episode of the 1970s considerably better than others. the bundesbank was role model for the independence of other central banks. second, a clear mandate for price stability. the eurosystem was built on these

francois villeroy de galhau : banking risks, regulations and supervision introductory speech by mr francois villeroy de galhau, governor of the bank of france and chairman of the autorite de controle prudentiel et de resolution ( acpr ), at the acpr conference, paris, friday 16 june 2017. * * * ladies and gentlemen, i am delighted to welcome you to this new conference organised by the autorite de controle prudentiel et de resolution ( acpr ). the three issues that will be discussed this morning – banking risks, regulation and supervision – are all essential and are naturally highly interdependent. to introduce this conference, i would particularly like to focus on the issue of regulations and their impact on the financing of the economy and growth. as you know, this is the subject we chose to address this year in the banque de france ’ s financial stability review, which will partly serve as a framework for your discussions this morning. ten years after the beginning of the financial crisis and eight years after the g20 summits in london and pittsburgh that forged a global action plan, it is time to take stock. we brought together 14 remarkable and complementary views for the financial stability review from public authorities, academics and industry representatives. what emerges is, to my mind, both an achievement and a challenge. * * * i. firstly, an achievement : the banking and financial system is substantially more resilient today than it was ten years ago. this is thanks to unprecedented international cooperation on financial reforms under the aegis of the financial stability board and the coordination of the basel committee in the banking sector, and thanks to the remarkable efforts made by the banking industry. thankfully, the world of finance in 2017 is not what it was in 2007. that is particularly true for banks in europe and in france. it is important to stress this achievement, as the european banking sector is often criticised, particularly from the other side of the atlantic, solely in the light of its difficult cases or institutions that are trailing at the rear, whereas on the whole, it is clearly far more robust than before the crisis. banks in france for example, have doubled their levels of capital since the crisis and generate a return on equity ( roe ) of 7 %, and even up to 9 % or 10 % when adjusted for one - off items. as regards this return, it is clearly lower than the pre - crisis levels, but in certain respects, this can be