France

Important institutional and policy changes have taken place since the 2012 FSAP. At the national level, the authorities have strengthened the macroprudential framework by establishing the High Council for Financial Stability (HCSF), enhanced monitoring of financial stability risks, prepared to manage the Brexit fall-out, introduced macroprudential measures, and taken various financial reform measures included in Loi PACTE—Action Plan for Business Growth and Transformation—and initiatives on digital finance, crypto-assets, green finance, and combating cyber risk. At the European level, significant changes include the Banking Union (BU), Capital Requirements Regulation/Capital Requirements Directive (CRR/CRD), Solvency II, and efforts towards a Capital Markets Union (CMU). The financial system is more resilient than it was in 2012. Capital positions and asset quality have improved. Banking business is better placed to handle cross-border contagion, including from exposures to high-yield EA economies. Insurers’ solvency ratios have been stable and have been bolstered by the effective implementation of Solvency II. Household savings and balance sheets are relatively sound and house prices presently appear broadly aligned with fundamentals.