ContextSpeech by the Governor of the Banque de France in Dublin, at the invitation of the Eurofi conference organisers.
Why it mattersThe new Banque de France Governor makes the case for truly European banking groups and simpler rules, a central debate in EU financial policy.
- European banks are losing ground to foreign groups in corporate and investment banking.
- Fragmentation prevents truly European banking groups from emerging.
- Europe must finance climate, digital and defence priorities in a fragmented world.
- Remove the fragmentation that blocks cross-border European banking groups.
- Simplify prudential rules while keeping banks resilient.
- Adapt the framework to the financing needs of the European economy.
Read the speech summary
1. Strong banks, lost ground
At the Eurofi forum in Dublin, the Governor of the Banque de France observed that fifteen years of reform have left EU banks with record capital and liquidity, yet foreign groups now handle about 60% of corporate and investment banking for European clients. Solidity alone will not finance the climate transition, digital needs, defence and Europe's financial autonomy.
2. A single banking market
Cross-border loans are under 15% of euro area lending and cross-border mergers are rare, because groups must still hold capital and liquidity country by country. He called for waivers allowing groups to manage them centrally, with guarantees that parents support subsidiaries in stress, without waiting for a common deposit insurance scheme.
3. Simpler rules, not weaker ones
Simplification must not mean deregulation: Basel III was right and must stay risk-based and uniform. He proposed aligning loss-absorbing debt requirements, removing overlaps between supervisory add-ons and minimum rules, and questioning EU-specific buffers. Delaying the trading book capital rules for 2027-30 protects competition with other regions, but a lasting answer is needed.
4. Financing Europe
Better internal models justify reviewing the output floor where it duplicates other safeguards, keeping lower capital charges for low-risk mortgages and possibly some unrated firms, and easing EU-only extras on trade and specialised finance. Revised securitisation rules should also widen market funding.