30 November 2004

Banque de France: Financial Stability Review

The Banque de France issued its Fifth Financial Stability Review discussing financial stability conditions over the last six months and also taking stock of the state of the banking system, the most recent advances in the regulation of financial activities in Europe and the main developments underway in market and post-market infrastructures.

The paper also contains five articles on topical issues relating to financial stability:

The first article assesses the “stress tests” conducted on the French banking system as part of the International Monetary Fund’s assessment of the French financial system in the last few months.

The second article focuses on the links between insurance and financial stability, via the examination of the systemic risk potential and also the way in which insurance and reinsurance companies act as shock absorbers.

The third article discusses the oversight of non-cash payment schemes seen from the point of view of its objectives and implementation procedures.

The fourth article is deals with the resilience of post-market infrastructures and payment systems. The article reviews the challenges to be taken up in order to achieve this and the main initiatives currently taken in this area in France and Europe to reinforce the resilience of the euro area financial system as a whole.

The last article presents a summary of the discussions held in the course of the Banque de France’s sixth international monetary seminar on “Credit risk management and financial stability”, which took place in June 2004 and recapitulates the discussions held in the two workshops devoted to “Basel II, credit risk provisioning and accounting standards” and “Credit risk management and its macro-financial consequences”, as well as the round table debate that brought the seminar to a close and focused on the financial stability implications of the sharp growth in credit risk management instruments.

Document

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