christian noyer : a review of the financial crisis speech by mr christian noyer, governor of the bank of france, at the hearing before the finance commission of the assemblee nationale, paris, 7 october 2008 ( updated 15 october 2008 ). * 1. * * a number of comments on the developments of the past month the bankruptcy of the investment bank lehman brothers on 15 september 2008 marked a crucial turning point in the crisis. the direct consequences of this failure, involving over usd 600 billion in assets, appear to have been correctly contained and managed up to now. nevertheless, it exacerbated the crisis of confidence, with the following major repercussions : • first, interbank markets increasingly seized up, because banks perceived there to be a rise in counterparty risk. overnight dollar interbank rates rose to particularly high levels of close to 7 % ; • second, significant pressure on other money market segments, in particular the us commercial paper market, where yields on 30 - day paper have been climbing since mid - september to reach levels close to those observed at the end of last year ; • lastly, the deterioration in the financial position of aig, the largest us insurer, followed by its exceptional bailout. a two - pronged rescue plan was implemented : on the one hand, the fed made an usd 85 billion loan at a penalty rate of three - month libor plus 850 basis points and, on the other, the us government took a 79. 9 % stake in the company. this exceptional intervention was necessary because aig had engaged in the highly risky business of selling credit protection over the past few years, which left it vulnerable and very exposed to a turnaround in the us housing market. the uncertainty stemming from this situation gave rise to the risk of a domino effect, affecting one financial institution after the next. fears that this effect could be fuelled by price manipulations and speculation resulted in a restriction of short selling, first in the united states and then in many other countries including france, the united kingdom, belgium, the netherlands, italy, germany, austria and australia. it was against this backdrop that the idea of an " overall solution " emerged, marking a change in strategy compared to the case - by - case approach that had prevailed until then. this was the underlying rationale for the paulson plan adopted on 3 october. three remarks on the latter : • the general idea behind the plan is for the treasury to purchase currently illiquid assets. it

francois villeroy de galhau : present challenges for france ’ s central bank hearing of mr francois villeroy de galhau, governor of the bank of france, by the senate finance committee, paris, 30 march 2016. * * * madam president, general rapporteur, senators, thank you for receiving me this morning, just a few months after your vote of confidence. i attach great importance to these regular exchanges in order to inform you of matters essential to the banque de france. in 2016, the world in general, and europe in particular, are experiencing a period of uncertainty : uncertainties relating to our security, with the threat of terrorist attacks still real ; political uncertainties, with the risk of “ brexit ” and the refugee crisis ; as well as economic uncertainties, with lower economic growth in emerging economies, including china, and excess market volatility in january and february. faced with this turmoil, the eurosystem, of which the banque de france is a member, is acting decisively. its monetary policy is supporting the economy and creating a favourable environment for taking all the other actions necessary to return to strong, sustainable and job - creating growth : france, and europe, must seize this opportunity to regain confidence. 1. monetary policy, first of all, is doing its fair share of the work. the eurosystem is determined to fight the low inflation that we are facing today and thus underpin economic activity. this is our mandate and we are striving vigorously to achieve it. the new comprehensive package of measures that we adopted on 10 march 2016 reflects two main objectives : first, to return to inflation rates below, but close to, 2 % over the medium term. this is not the case at present since inflation stood at – 0. 2 % in the euro area in february, taking account of the sharp decline in oil prices, but it should return to positive territory in the second half of 2016. the other objective is to bolster the financing of the real economy and to protect it from the pressures related to market volatility. the new series of targeted refinancing operations extension of the asset purchase programme, for its part, will be of particular benefit to large french corporations. we are convinced that these additional measures will deliver concrete results, as did the successive measures we have implemented since june 2014. the latter have indeed boosted lending to businesses, while lowering the cost of credit, and made a 0. 3 % contribution