Villeroy de Galhau outlines decade of supervision lessons
François Villeroy de Galhau, Governor of the Banque de France, presented the ACPR Annual Report for the final time. He reviewed a decade of banking supervision, highlighting significant progress and future challenges.
A decade of strengthening capital
Governor Villeroy de Galhau reflected on the period from 2015 to 2025, marking a transition from post-crisis recovery to a time of uncertainty.
He noted the finalisation of Basel III in 2017, transposed into European law (CRR 3, CRD 6) in June 2024, with full implementation due by 2033.
French banks significantly strengthened their CET1 ratios, rising from an average of 12.5 percent in 2015 to 15.6 percent by the end of 2025.
Insurance undertakings also saw their Solvency Capital Requirement (SCR) coverage ratio increase from 226 percent in 2015 to 250 percent in 2025, navigating both prolonged low and rapidly rising interest rate environments.
The resilience of European financial institutions, particularly in France, has been consistently confirmed by rigorous stress tests, demonstrating sufficient capitalization without the need for additional requirements.
New horizons of risk
Villeroy de Galhau identified four new developments shaping the financial sector.
Brexit prompted relocation of 60 institutions and €220 billion in assets to Paris.
Climate challenges accelerated, leading to ACPR's climate stress tests and NGFS contributions.
The digital revolution introduced MiCA for crypto-assets and DORA for cybersecurity, now a systemic risk.
Finally, the return of geopolitics highlights the need for international standards and European financial and technological sovereignty.
Simplify, compete, unite
Villeroy de Galhau advocates for a shift towards simplification and competitiveness in European banking, without compromising security.
He stresses the imperative to complete the Banking Union, fostering cross-border mergers for shared sovereignty and prosperity.
Proactive regulatory adaptation to advanced AI and tokenisation is crucial to avoid being left behind.