the reduced cost of risk. in this context, it is important to remember how much our financial institutions owe to the strength of our prudential rules. twelve years on from the 2009 great financial crisis, it is no coincidence that the current crisis – health - related, economic – has not this time escalated into a financial crisis. this is in large part thanks to our prudential framework which has considerably increased the resilience of the main french banks, as well as that of their european and international peers. so yes, it is in our national interest that france remain committed to a full implementation of the december 2017 basel iii accord that is fair, definitive and reasonable : fair in the sense that there must be regulatory consistency with the united states, which appears to be fully guaranteed ; definitive because there will be no basel iv ; and reasonable with regard to the application of the output floor. i support the application of the output floor at consolidated level for french banking groups, and solely for the calculation of the capital requirements defined in the basel accord, as proposed by the franco - german position. in insurance, solvency ii has enabled firms to confront the crisis on a very solid footing. but, as well as providing essential support for equity investment, the review of the regulation must allow us to strengthen the supervision and cooperation framework for cross - border activities. it is unacceptable that our national guarantee funds have to cover insurance payouts in the event of failures of cross - border insurers. supervisors and guarantee funds in countries of origin should be made to shoulder more responsibility. our single market has its rules : freedom of movement does not imply free - riding! ii. five essential challenges still need to be addressed in the short term, two challenges linked to the exit from the crisis let us turn now to the challenges. the emergence from this crisis remains shrouded in uncertainty, and is very much conditional on the financial health of our firms. the acpr is paying close attention to the impact of the rising risk of bankruptcies on banks ’ solidity, and has not so far noted any significant increase ; i have already taken the opportunity to put some of the overly alarmist readings of the esrb ’ s recent report into perspective. with the recovery, the lifting of the public health restrictions will need to be followed by a winding down of public aid mechanisms. support for businesses has to switch from the widespread provision of liquidity to a more selective phase of quasi - equity based support, targeted at firms that

are economically viable but that have been financially weakened by the crisis. as the health and economic situation gradually normalises, there will be no reason to maintain the exceptional crisis support measures beyond next year : this applies to the buffers and flexibilities decided on at the start of 2020. the restrictions on dividends could also be lifted from as early as september 2021. this is vital if we are to ensure that our financial institutions remain attractive in a context of heightened international competition, where the exceptional measures are often more flexible, as in the united kingdom, or are in the process of being lifted, as of 30 june this year, for the majority of us banks. three longer - term challenges i shall turn now to the three structural challenges that financial institutions will need to address in the next decade : profitability, innovation and climate action. for banks, profitability is no longer an issue linked to monetary policy. it is important to stress this : tiering and the particularly attractive pricing – now up to - 1 % – of our tltros more than make up, in 2021, for the annual charge generated by negative interest rates. the path to profitability is now through the continuing modernisation of financial institutions themselves, but also through the emergence of a genuine “ single banking market ”. we need to take advantage of the size effect and encourage the formation of pan - european banking groups : we must never give up on the goal of a genuine banking union, despite protectionist resistance from “ host ” countries. this integration also requires efficient methods of crisis management. europe needs to strengthen its resolution framework, to ensure the effective exit of non - viable banks in europe, without burdening solid banking systems with additional financing – which would mean adjusting the financing of the srf ( single resolution fund ). the impact of low interest rates is different, however, for insurers. the integration of psrs into own funds has already allowed them to offer sufficiently attractive revaluation rates in a low interest rate environment. it should also give insurers valuable time to rethink their offering and shift it towards longer term, more equity - based products that make better use of savings to strengthen our economy. innovation will be at the heart of the transformation that financial institutions need to make over the next decade. europe is clearly losing momentum here, just as the crisis is accelerating the adoption of digital technologies, with bigtechs poised potentially to redefine financial intermediation. for incumbent players, this