Outstanding loans secured by commercial real estate accounted for a limited share of French groups’ balance sheets (3.24%). As for the cost of risk on the household portfolio, it remains relatively stable.
Next, market risk and financial instability, which increase with US unpredictability. Since the beginning of 2025, and particularly between 2 and 9 April, there have been renewed episodes of market volatility, notably due to heightened global trade tensions and mounting fiscal uncertainty. The US Treasury market saw a sharp rise in long-term rates, with the 30-year yield rising from around 4% in September 2024 to more than 5% today.xi Heightened uncertainty could trigger further spikes in volatility, potentially exacerbated by the growing and more procyclical involvement of certain non-bank players such as hedge funds. This situation highlights the need for adequate monitoring tools and an appropriate regulatory framework for non-bank finance. In order to take better account of the risks associated with financial sector interconnectedness and better understand their nature and transmission channels, the ACPR and the Banque de France are currently working with the French Financial Markets Authority, the AMF, to develop a pilot systemic stress test exercise this year involving banks, insurers and investment funds. The exercise has no regulatory implications.
2.2 One imperative: the European dimension must finally become a strategic advantage
However, these upheavals can and must be an opportunity for Europe,xii if – and only if – we quickly activate three clear levers: (i) simplifying, (ii) unifying and, consequently, (iii) securing our financial sovereignty.
It is now time to exit this cycle of regulatory standard accumulation. Financial stability comes with regulatory stabilisation. Simplification in no way means deregulation, but rather better regulation. The European approach to simplification must remain firm on fundamental objectives but more agile in its conception; reducing complexity, not necessarily requirements.xiiiSince February 2025 and our letter signed jointly with the governors of the Bundesbank, the Banca d’Italia and the Banco de Españaxiv, I have warmly welcomed the creation of two high-level task forces: one at the EBA and the other at the ECB, chaired by Vice-Chairperson Luis de Guindos. These two task forces have been set up to look at all aspects of simplification – of regulation, supervision and reporting – and to make concrete proposals this year.
Next, unifying: the Savings and Investments Union (SIU) has become a strategic priority, with political momentum building thanks to the remarkable convergence of the Draghixv and Lettaxvi reports in 2024 and then the strategy unveiled by European Commissioner Maria Luis Albuquerque in March 2025. I would like to make a brief comment on the change of name: the aim is to combine two priorities that we too often tend to treat as opposites – the Banking Union and the Capital Markets Union. And I would quickly like to explain the objective more clearly: to make European investment more dynamic and innovative by promoting effective capital allocation and more equity financing.vxii But for intention to become action, I call for a mobilising deadline, as Jacques Delors did in the past with 1 January 1993 for the single market, and 1 January 1999 for the single currency.xviii It is up to the Commission to propose this deadline and the Council to approve it, but why not 1 January 2028? We need to give ourselves two to three years to emerge more powerful and sovereign from the policy turnaround of the US administration. As a lovely Italian saying goes: “The difference between a dream and a goal is a deadline”.xix This is Europe’s moment. If we remain as slow as we are today, we will miss it.
Europe, with its abundant savings, has the financial resources needed for greater sovereignty. But it must also better recognise the need for powerful intermediation and therefore a competitive industry. On the European wholesale financial markets, only three of the ten banks generating the majority of commissions from investment banking activities are from the euro area, and account for 27% of commissions. US banks, meanwhile, account for 57%. The objective of competitiveness is important for industry, and rightly so; but there is also a hierarchy of objectives. Just as price stability is the primary objective of monetary policy ahead of supporting growth, financial stability must continue to be our primary objective. But once financial stability is secure, we must of course support competitiveness.xx
Meanwhile, the establishment of the new European anti-money laundering authority, AMLA, is an opportunity to ensure the effectiveness of the fight against terrorism and money laundering at the European level. At a time when some appear to be scaling back their commitments to fighting corruption and promoting transparency, Europe must remain exceptionally vigilant, including with regard to foreign institutions operating on its territory. A financial industry is all the more powerful when it is transparent, and above suspicion.
I would like to conclude by quoting Paul Valéry: “The future is not what is going to happen, but what we are going to do”.xxi Over the past ten years, we have been able to learn the lessons of the crises and preserve financial stability. But today, history is accelerating, and financial Europe must pick up the pace too, by better integrating our market, asserting our European sovereignty and freeing up our capacity for innovation. France has the advantage of hosting Europe’s leading financial sector: our country combines both the strength and the ambition to seize this moment of acceleration.