December 2016

Basel: On the home stretch

The deadlines are accelerating. There was major progress in the discussions during the supervisors' meeting in Santiago in Chile in November.

However, the way in which the Basel Committee works is not a very satisfactory process, with a real lack of transparency. Why does the Committee refuse to carry out and publish an impact study prior to finalising this agreement?

We understand that the agreement currently being discussed is favourable to US banks and would generate new constraints for European and French banks. In the name of what? This new agreement is no doubt aimed at ensuring comparability and regulatory visibility. However, should this be implemented in favour of a standardised risk approach and to the benefit of a single banking model, the Anglo-Saxon model?

These developments could affect whole areas in terms of the financing of the economy, such as for example asset and infrastructure financing and residential mortgages.

If an agreement is reached in Basel, it is because the progress has made it possible, so it is to be hoped, to avoid a significant impact. Europe will have to verify the consequences on the financing of its economy. And perhaps question the actual process that has been conducted to increase regulatory requirements on European players, including those for which nobody questions their solidity and good risk management, and reduce them on their competitors.
Marie-Anne Barbat-Layani
Chief Executive Officer of the French Banking Federation

Tweeter : @FBFFranceTweeter : LinkedIn

Our Positions

The truth about bank fees
The banking industry is transparent in informing all customers of any fee changes two months before its application. It is one of the few sectors to do so! Moreover, these fees are accessible everywhere, whether in the branch or on banks' websites. And customers know exactly how much their bank costs them with the annual statement of bank fees. As for account keeping fees, admittedly they are widespread in France since the majority of banks have introduced them, but this is the case everywhere in Europe. It is also important to highlight that through the packages offered by banks, nearly half of customers do not pay them. Moreover, the significant disparity in fees between banks according to the products and services testifies to healthy competition. As highlighted by the "Observatoire 2016 des tarifs bancaires" (2016 Observatory of Bank Fees), headed up by the CCSF (Financial Sector Consultative Committee), changes in fees are controlled. Banking activity is a commercial activity, and the services that it offers have a price that takes account notably of the substantial investment ensuring a high level of service and security, as well as innovations always aimed at serving the customer. Remember that since 1998, the increase in the price of financial services has been less than inflation and therefore favourable to the consumer.

Residential mortgages: more purchasing power for households
The home loan market in France has solid fundamentals: the banks practice responsible lending, based on the borrower's ability to repay. 9 out of 10 loans are at fixed rates, which ensures the borrower has visibility, and reliable and inexpensive guarantee methods, namely the security and borrower insurance. The 2016 figures once again demonstrate the dynamic nature of this market: +4% year-on-year at end-October representing total outstandings of €888 billion. This phenomenon is reinforced by very favourable loan access conditions for French households. Interest rates are historically low, having gone from 4.8% in 2008 to 1.9% in 2016 (for an average loan over 20 years). In 8 years, French households have therefore gained 29% of purchasing power (according to a study by Crédit Foncier de France, December 2016).

French banks at the forefront in promoting innovative payments
During the meeting of the "Comité national des paiements scripturaux" (National Cashless Payments Committee) on 15 November 2016, the Minister of the Economy and Finance, Michel Sapin and the Governor of the Bank of France, François Villeroy de Galhau, highlighted the positive outcome of the commitments made by the banking profession to support the national strategy regarding payment instruments. In particular, banks undertook to increase the information provided to the retailer on the fees related to cards, with a more complete and standardised statement. They also undertook to promote innovative and secure payments. A few figures demonstrate this success: 41% of these contactless CB cards were used for at least one transaction in "contactless" mode in September 2016, i.e. +91% vs. the same period in 2015. And 56.4% of stores fitted with "contactless" facilities carried out at least one "contactless" transaction in September 2016, i.e. +55% compared to September 2015.

In their own words

François Villeroy de Galhau appeared, on Friday 9 December 2016, in the "Good Morning Business" programme on BFM

"if you want to invest, you are ensured of benefiting from favourable financing conditions that are unprecedented". One strength which France enjoys which is rarely spoken about: we have a robust banking system, we have the most dynamic loan volumes in Europe - both for companies and households - and we have the lowest lending rates in Europe. There are, thanks mainly to the actions of Eurosystem, favourable investment conditions; this is true"

FBF and the media

Interview with M-A Barbat-Layani: "Banks are key players in innovation", Magazine des Professions Financières


In an opinion column for the "Magazine des Professions Financières et de l'Economie" (Magazine of Financial Professions and the Economy), Marie-Anne Barbat-Layani highlights the major role of banks in the financing of innovation in France: "Bank lending accounts for 61% of corporate funding". She explains on what criteria and how the banks can intervene according to the company's life cycle and its needs. Banks' involvement is not limited to financing. Some of them have put in place centres dedicated to innovative SMEs and start-ups in order to help them grow. Finally, Marie-Anne Barbat-Layani concludes by reiterating that strengthening the level of the company's capital is a major issue since its debt capacity is dependent on this: "Accordingly, increasing the innovation of companies must be supported by the better channelling of savings, and therefore taxation that must encourage long-term investment in the corporate sector".

"The cancellation of borrower insurance suppressed", Les Echos


The Constitutional Council has suppressed the possibility for the annual cancellation of borrower insurance. The FBF has responded by explaining: "It is a procedural decision. It is also good news for borrowers since the mutualisation is preserved. It allows wide access to insurance and residential mortgages". There already exists in France, with the 2014 Hamon law, the possibility of changing borrower insurance policy in the year after the loan is taken out subject to the new policy having at least an equivalent level of cover to the first policy.



Malta will assume the Presidency of the Council of the European Union for 6 months


Centre for financial professions: 11th Convention for financial professions


Bank of France/Collège de France: "Secular stagnation and growth measurement" conference

17 - 20

47th Global Economic Forum, Davos


ECOFIN Council

25 / 26

Paris Fintech Forum

Tweet of the month

Figure of the month

.@PhilippeBrassac @FBFFrance underlined: "#Basel must take stock of the specific characteristics of risks and #funding models in Europe"

5 French banks in the European Union top 10