lending ". even if it is exaggerated, this impression is not good for anyone : not for the banks or their image ; not for the housing sector, as it can discourage borrowers ; and not for the overall economic assessment. the excessive “ halo ” around housing loans no doubt prevents us from focusing on other necessary levers for action in the sector : the supply of land ; the proliferation of regulatory standards ; and overlapping tax incentives and subsidies of a complexity unrivalled elsewhere in europe. progress is being made around these different issues but i would like to examine two questions with you here this morning : • hcsf ( haut conseil de stabilite financiere - high council for financial stability ) standards are an easy and recurring target for criticism, but - do we need to say it again? - the hcsf was created not by the banque de france but by french national law, namely the 2013 banking law. over the last few years, it has unanimously achieved its mission of mitigating risk amid the continuing and exceptional increase in household indebtedness, and the marked deterioration in loan maturities and debt servicing costs. moreover, its standards are not restrictive these days as banks have the capacity to lend more thanks to all of the flexibilities provided by the hcsf's decision within the 20 % flexibility margin. the total flexibility of 20 % for the main criteria – debt service to income page 10 of 12 ratio and loan maturities ( currently set at 35 % and 25 years maximum, respectively ) – was only used up to 14. 3 % on average over q3 2023. more specifically, the 6 % flexibility on buy - to - let investments is only being used up to 2. 6 %. making greater use of these flexibility margins rather than challenging them is the best way for banks to lend more... provided of course that they maintain the volume of compliant loans : we will take care to ensure that longer, riskier loans do not replace safer loans. that said, as stated in its press release of 26 september 2023 iv, the hcsf will examine possible new technical adjustments provided they do not lead to an increased risk of overindebtedness. • the bank rejection rate should not increase for similar levels of risk. this rate is not measured in a precise manner, however there is a widespread impression that it has risen. but if we go back to the assessment i made in the first part of my speech

set out in basel ii thus aims to ensure that securitisation transactions now have their own economic reality, rather than seeking regulatory arbitrage as was sometimes the case under basel i. based on two fundamental principles – first, the actual nature of risk transfer and second, the significant nature of these transfers – the treatment of securitisation in basel ii applies not only to banks acting as originators and investors but also as sponsors. this treatment also takes account of the many specific mechanisms in this type of transaction, such as early amortisation clauses and credit enhancement. lastly, it introduces a requirement for regulatory capital to be tailored for certain off - balance sheet exposures, particularly liquidity facilities associated with these transactions, which under basel i were generally exempted of any capital charge. second, by reinforcing the link between the capital base and the risks actually incurred, basel ii encourages banks to improve their systems for managing these risks as well as their due diligence procedures. beyond reminding banks of the basic caution required when extending credit, this encouragement is all the more useful in that banks now often play a role in securitisation transactions for which the underlying assets, for example housing loans, may be initiated by unregulated entities, that are not always accountable for their risk analysis and pricing. in other words, the weaker the discipline surrounding the granting of a loan the stronger banks ’ diligence procedures needs to be. thirdly, basel ii gives banks and supervisors a vital tool, pillar 2, with which to assess the risk profile of institutions and in particular to take account of certain risks that are sometimes difficult to quantify but whose impact can be great. by way of example, i shall merely mention refinancing risk and reputational risk. pillar 2 thus enables banks, through the determination of the level of economic capital and supervisors, via for example an increase in capital requirements, to ensure that all of the risks incurred are appropriately covered. fourth, basel ii sets out to promote stress tests as one of the tools for managing and assessing risks. this is very important in dealing with the turmoil like that we are currently experiencing. basel ii stipulates that the stress tests conducted by banks must incorporate the effects of a large increase in credit and market risks as well as those of a rise in liquidity risk. the aim is to ensure that banks hold sufficient capital to absorb severe shocks. fifth and last, basel ii aims to substantially reinforce transparency and market discipline.