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The Banking and Financial Regulatory Committee
The Banking and Financial Regulatory Committee's task is to “fix the general regulations applicable to credit institutions and investment firms within the framework of the guidelines laid down by the Government”. Its scope of competence is defined by the Act and can be divided into six categories with regard to credit institutions:
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the general conditions for conducting banking business, in particular capital adequacy requirements, the conditions for establishing branches or setting up professional databases; |
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the type of operations handled by credit institutions, notably the remuneration of credit accounts, customer relations and credit instruments and rules; |
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the organization of the interbank market; |
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accounting rules (valuation of transactions, bookkeeping, presentation of individual company and consolidated annual accounts, terms of disclosure, etc.); |
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management standards, in particular prudential ratios regarding solvency, liquidity, large exposures, etc.; |
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internal control procedures. |
As regards investment firms, the Committee issues regulations concerning capital adequacy requirements, accounting rules, management standards and internal control procedures. This is done after consultation with the Financial Markets Council (Conseil des marchés financiers – CMF), provided it does not infringe the jurisdiction of the French stock market watchdog (Commission des opérations de bourse – COB) regarding portfolio management companies. The Committee also lays down the conditions under which credit institutions and investment firms can issue negotiable debt securities.
Specific legislation has extended the Committee's authority to other fields, such as the Act of 12 July 1990 on countering the laundering of proceeds from drug-related and criminal activities, and the Act of 31 December 1989 creating the national database on household credit repayment incidents (Fichier national des incidents de remboursement des crédits aux particuliers – FICP) to help prevent personal debt problems, which is now incorporated into the consumer protection code.
Lastly, by virtue of the Act of 16 July 1992, the Committee is responsible for setting out the conditions under which credit institutions with headquarters in another EU Member State may set up a branch or freely provide services in France without having to seek specific prior authorization. Since 1 January 1994, these conditions also apply to credit institutions having their headquarters in a State that is not an EU member but that is party to the agreement on the European Economic Area.
The Committee is chaired by the Minister for the Economy and Finance or his representative and comprises the Governor of the Banque de France, who is also Chairman of the Banking Commission, as well as five other members appointed by the Minister for three-year terms.
The Chairmen of the COB and the Financial Markets Council and a representative of investment firms also participate in discussions regarding general provisions for investment service providers.
The Committee operates under the authority of its Secretary General, using resources provided by the Banque de France. Banking and financial regulations are thus prepared and implemented with close co-operation between the Ministry for the Economy and Finance and the central bank.
Each year, the Committee publishes an activity report as well as an updated collection of regulatory texts relating to the conduct of banking business.
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