Moulin links financial competitiveness to resilience
Bank of France Governor Emmanuel Moulin said financial resilience and competitiveness reinforce each other. At the ACPR conference in Paris, he urged France to adopt a budget before year-end that brings its deficit below 5 percent of GDP.
Higher yields test public finances
Moulin said sovereign bond yields had risen across advanced economies since the summer.
He cited the Middle East conflict and its inflation effects, expectations of central bank rate increases and a sharp increase in corporate bond issuance.
Budget uncertainty had amplified the pressure in France.
Higher yields raise public debt servicing costs and concerns about fiscal trajectories.
He called for a budget before the end of 2026 that brings France's government deficit below 5 percent of GDP.
He warned that further interest rate increases would also make borrowing more expensive for households and businesses, weighing on financing and growth.
Banks and insurers absorb shocks
Moulin said banks and insurers remained equipped to withstand the environment, citing their resilience through the Covid-19 pandemic, interest rate increases beginning in 2022 and banking turbulence in 2023.
Continued credit flows, strong life insurance inflows and robust profitability supported his assessment.
Speaking as governor and chairman of the French Prudential Supervision and Resolution Authority (ACPR), he described financial institutions as shock absorbers that support the real economy.
Resilience supports the financing channel
Moulin presented resilience and competitiveness as mutually reinforcing objectives.
His assessment rests on continued financing and robust profitability despite past shocks.
Rising sovereign yields remain a test because they affect public and private borrowing costs.