Financial Stability Review

Financial Stability Review no. 24 - March 2021

Published on 1 March 2021
Fronton du 39 rue Croix-des-petits-champs. Crédit:  Banque de France - Philippe Jolivel
Authors : François Villeroy de Galhau, Luis De Guindos, Gabriel Makhlouf, Richard Portes, Jonathan Dixon, Song Shin Hyun, Stefan Avdjiev, Bat-el Berger, Claudia Buch, Linda Goldberg , Mathieu Bussière

This 24th edition of the Banque de France’s Financial Stability Review is a special issue devoted to macroprudential policy in the midst of the Covid crisis.

For a decade, we have been defining and implementing the macroprudential framework. While macroprudential policy is designed to address financial crises, it is also relevant in this economic crisis caused by the health crisis.

While this is not a crisis of the financial system, and banks have on the contrary provided some of the responses to combat the economic crisis, it has nevertheless occurred in the context of financial vulnerabilities resulting from a vibrant financial cycle expansion and persistently low interest rates: high valuations of some assets, high levels of public and private debt, and the growing strength of the non‑bank financial sector.

The different points of view expressed in this edition provide insights into the issues that will be on our macroprudential agenda in the coming decade. In particular, it is essential (i) to better address the international dimension of systemic financial risk, and more specifically to strengthen the European macroprudential framework; (ii) to extend the application of macroprudential rules to the financial sector as a whole, beyond banks; (iii) to establish better coordination between monetary and macroprudential policies on financial stability issues.

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