for other european sovereigns. a challenging question is now being asked : over the last 50 years, financial markets have developed on the assumption that public debt was considered risk free. the certainty that debt would be paid in full strongly anchored market views. now that this certainty is questioned, debt sustainability may rest on a more fragile and volatile basis. no immediate consequences have been felt so far in the us debt market which remains the most liquid one and the ultimate benchmark for assessing risk. however, a pervasive uncertainty has been created, which might be responsible for the decline in confidence that has occurred over the last weeks. in europe, on the contrary, sovereign credit risk has had immediate and dramatic consequences. it is difficult to foresee how, in the longer run, markets will assess debt sustainability. bis central bankers ’ speeches but let me challenge some current analyses about debt sustainability in europe. – first competitiveness. in the uk, for instance, the effective real exchange rate has depreciated by 23 % over the last four years and its exports have grown by a healthy 15 %, year - to - year over the first semester of 2011. but italy, spain and greece have done better, with exports growing respectively by 16 %, 19 % and 37 % over the same period, with, of course, no internal exchange rate adjustment. linking competitiveness with exchange rate depreciation is therefore too simplistic. improving competitiveness can be achieved by proper domestic reforms with a lasting result. – second, the euro is the only major currency area with its external accounts in balance, which is a strong guarantee of long - term solvency. – third, the euro area ’ s aggregate budget deficit will stand at around 4. 1 % in 2011, less than half that of the uk or the us. the same holds true for public debt, which amounts to 85 % in the euro area while it will soon cross the 100 % mark in the us. many countries are improving their fundamentals. the primary deficit of spain for 2011 will be around 4. 7 %, half that of the us and the uk. italy will be one of the very few advanced economies to have a primary surplus, around 0. 5 %. the imf has recently acknowledged, and even praized, these efforts and commitments. in short, if good fundamentals are an absolute necessity, it is not a sufficient condition. now can we let liquidity spirals lock a country, just like a

denis beau : mastering ai in the financial sector - let us collectively rise the challenge! speech by mr denis beau, first deputy governor of the bank of france, at the paris financial centre event devoted to artificial intelligence, paris, 11 december 2024. * * * ladies and gentlemen, first of all, i would like to thank the organisers for their invitation to this paris financial centre event devoted to artificial intelligence ( ai ) : it gives me the opportunity to continue the dialogue that we at the banque de france and the acpr have been conducting with financial players on this important matter for the industry. i'll be brief on the observation : ai is one of the most powerful forces driving the current transformation of the financial sector. its adoption has accelerated with the advent of generative ai, which has made the opportunities in terms of productivity, customer interaction, compliance management, etc. more accessible - and visible to all. as supervisors, but also as users of these new technologies, every day we can see the speed and potential of this phenomenon. naturally, these technologies can give rise to many risks, for all financial system participants as well as for the stability of the system as a whole. it is essential that they are properly managed : the following round - table discussion will shed light on these risks and the operational challenges they present. i'll mention just one of them now, but not the least important : cyber risk. in my view, it is a good illustration of the complex issues we are facing. ai amplifies cyber risks, not least because it is used by attackers to increase their effectiveness ; ai also has its own specific vulnerabilities ( such as the risk of data poisoning ). conversely, ai can provide the antidote, and improve it security management, for example, by helping to detect suspicious behaviour or new threats. greater cooperation is needed in this area between data scientists and cybersecurity specialists, in order to unlock the full potential of ai for cybersecurity. i would now like to turn to the regulatory and supervisory aspects that a supervisor naturally thinks of when discussing the opportunities and risks of ai. the european union has been a pioneer in this field, with the ai act. this will mainly concern the financial sector for two use cases : creditworthiness assessment for granting credit to individuals, and risk assessment and pricing in health and life insurance. the acpr should be responsible for enforcing this regulation, as market surveillance authority. this new regulation, and