presentation of the annual report of the autorite de controle prudentiel et de resolution ( acpr ) for 2022 press conference, wednesday 31 may 2023 speech by francois villeroy de galhau, governor of the banque de france chairman of the acpr page 1 of 9 ladies and gentlemen, i am pleased to welcome you to our yearly presentation of the annual report of the autorite de controle prudentiel et de resolution ( acpr – prudential supervision and resolution authority ), in the company of jean - paul faugere, vice - chairman of the acpr, alain menemenis, president of the sanctions committee, and nathalie aufauvre, secretary general of the acpr since january 2023. the events of 2022 and the beginning of 2023 have raised significant challenges, but also two valuable confirmations : that of the soundness of the french banking and insurance sector ( i ), and that of the european model of regulation and supervision ( ii ). we nevertheless need to take reinforcement actions in the short and medium term ( iii ). i. major challenges that confirm the robustness of our financial system... 2022 will naturally remain the year when russia invaded ukraine. geopolitical uncertainty spread to the financial sector, notably with the sharp rise in commodity prices and margin calls on their derivatives. this was compounded by other sources of volatility, in particular on the uk's sovereign debt, and the collapse of a number of crypto - assets. page 2 of 9 furthermore, the nature of inflation changed : it became more domestic, affecting services and manufactured goods, and it is precisely on this " underlying " component that monetary policy had to act, and acted strongly. but it must be reiterated, the rise in interest rates generally benefits french and european banks, thanks to their diversified business model, broad deposit base and large loan portfolio. the'svb model'in the united states, penalised by the rise in interest rates, was an exception rather than the rule. french banks have demonstrated their robustness : their net banking income and their interest margin increased by 5. 3 % and 4. 5 % respectively in 2022. i hear that french banks'margins would be penalised, compared to their european counterparts, on the liabilities side due to regulated savings, and on the assets side due to fixed - rate housing loans. with regard to the first subject, the interest rate on

measures proposed last december by france assureurs to ensure that unit - linked policies that are both overpriced and underperforming are more effectively removed from commercial offers. the industry should make a public announcement detailing these measures by next week. european dora regulation published at the end of 2022, whose implementing decrees are currently being drafted, will allow for a better management of cyber risk, which has been particularly significant in recent months. page 8 of 9 france was ranked first in the fight against money laundering and terrorist financing by the fatf in its may 2022 assessment report. we must pursue our efforts to remain exemplary and play a leading role at international and european level, in particular in connection with the french bid to host the new european authority ( amla ) in in this area. as regards climate risk, despite major advances in terms of transparency and disclosure standards, the first dedicated stress tests - including the one pioneered by the acpr - showed that preparation for physical and transitional risks could still be improved. as regards the insurance sector, eiopa has conducted a first stress test on european supplementary occupational pension schemes. the acpr has continued its work with insurers to prepare for the next exercise, which will take place in 2023 and whose results will be published in the first half of 2024. lastly, and perhaps most importantly, as a number of recent episodes of market volatility have shown, non - bank finance poses an increasingly important systemic risk and needs to be better regulated, both at the microprudential and macroprudential levels, in order to control leverage and contain liquidity risk. * * * page 9 of 9 we have just celebrated the 25th anniversary of the ecb, and next year we will mark the 10th anniversary of the ssm within the ecb. this is certainly not a time for complacent celebrations ; it remains a time for active vigilance. but these milestones are an opportunity to recognise that, throughout years of severe international crises, the european financial system, and particularly the french one, is increasingly resilient. the acpr is committed to contributing further to this. i will now hand the floor to jean - paul faugere, vice - chairman of the acpr, to speak about the insurance sector. i the slight decrease observed in 2022 results from lower tier 1 capital, which was impacted among other things by the lower valuation of insurance subsidiaries due to the rise in interest rates, compounded with