In 2023, the world was hit by a series of shocks.
What major events would you identify for the Banque de France?

Shocks and anxiety have unfortunately taken their toll on our collective morale: wars, including in the Middle East since 7 October, and geopolitical instability. There was also plenty of further evidence of climate change in 2023, with record heatwaves, storms and flooding. But I would also like to mention the progress in artificial intelligence and, closer to home, the hosting of the forthcoming Olympic Games in France. In a highly uncertain world, we need stability and confidence more than ever. The Banque de France is one of these crucial anchors, and it has stayed the course in its main missions to serve the public. For example, we decided to make the biggest investment in our history, in Europe’s most modern banknote printing works in Auvergne. And last August we marked the 30th anniversary of our independence, which is a decisive lever for defeating inflation.

So how is the Bank doing in fulfilling its primary mission of price stability?

Inflation remained too high in 2023, and this is rightly the major concern of French citizens and our own. But we have made great strides: after peaking at 7.2% in February 2023, it fell back to 3.1% in February 2024 (provisional figure). It will continue to fall and move closer to the 2% target, which we are committed to achieving by 2025 at the latest, barring any new shocks. The rise in prices of food and services is still too high, but the Eurosystem’s monetary policy is effective in reducing inflation and thus preserving purchasing power.

Has the financing of the French economy been properly ensured?

The rise in interest rates led to an increase in lending rates to businesses and individuals, but was essential to curb inflation. After several years of ultra‑low rates, we have returned to levels that everyone considered normal in the decades preceding the Great Financial Crisis of 2008. And despite the rise in interest rates, the economy continues to be well financed: outstanding loans continued to grow in 2023, by 1.5% for housing loans and 2.7% for business loans. In early 2024, interest rates stabilised, including on housing loans.

As regards financial stability, in 2023 several banks failed in the United States and Switzerland,
but not in France or the euro area. Why?

Following the Great Financial Crisis of 2008, the so‑called ’Basel III’ financial regulations were adopted at the international level to shore up the financial system, and we have applied them better in the euro area than in the United States. In France, it was also thanks to the professionalism and efficiency of the staff responsible for financial stability at the Autorité de contrôle prudentiel et de résolution (ACPR) and the Banque de France.

What services has the Banque de France provided to the economy and society across the nation?

This is one of the unique features in France of which we can be proud: as well as implementing monetary strategy and ensuring financial stability, the Banque de France is present nationwide, with 105 sites, to support businesses and households, particularly the most vulnerable ones. The economic slowdown and inflation have caused difficulties for many French people, but the departmental branches of the Banque de France have been active in helping overindebted individuals. We provide extensive support through our local business services and our economic and financial education policy, which trains more than 130,000 people in economic, budgetary and financial areas. With our work on the digital euro and the climate indicator for businesses, we are also key innovators in supporting citizens in the ecological and digital transformations.

An annual report is usually the time to be accountable to our fellow citizens.
Could you tell us about the accounts of the Banque de France?

Like many other central banks, the Banque de France was affected by the rise in interest rates. Having recorded very substantial monetary income up to 2022, it has now fallen sharply. We have to accept this, because our mandate is to fight inflation, not to maximise our profits. In 2023, like the previous year, the Banque de France’s accounts nevertheless remained balanced. Indeed, we have always followed our motto since 1800: “Wisdom fixes fortune” – or rather, today we would say that ’wisdom brings solidity’. We therefore applied sound management practices in profitable years to build up our reserves and provisions. In addition, we have carried out our missions while streamlining our methods, simplifying our processes and decentralising responsibilities. This is the aim of our strategic plan, which we will be extending to 2025 by adding a ’’Wellbeing at work’’ component.

How would you sum up 2023 in a word?

If I might use two words, they would be resilience and mobilisation.

Resilience, because at 0.9%, GDP growth held up relatively well in France. After the invasion of Ukraine, remember, there was a fear of both recession and inflation setting in; we are now expected to escape both.

But mobilisation too, because now we’ve emerged from the inflationary crisis, we’re back to the enduring challenges facing the French economy: not enough jobs – even though we’ve made progress – and too much public debt and red tape. This is not a foregone conclusion: reforms are succeeding elsewhere, and we in France have more assets than we think.

To strengthen our economy, the 9,000 women and men of the Banque de France mobilised for our fellow citizens, and they continue to innovate to provide an excellent public service at the best possible cost. This annual report pays tribute to them: our actions are based on the commitment and skills of each and every one of them.

The Banque de France in 2023 :

Protection of financially vulnerable people

EDUCFI (Financial education)

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