France: Financial Sector Assessment Program-Technical Note-Macroprudential Policy Framework and Tools

International Monetary Fund

No 2019/327, IMF Staff Country Reports from International Monetary Fund

Abstract: This technical note on macroprudential policy framework and tools on France highlights that the institutional arrangements provide adequate powers to ensure Haut conseil de stabilité financière’s (HCSF) ability to act; however, some tools remain outside its legal domain. The report also discusses that The HCSF should evaluate effects of tools introduced to mitigate risks from corporate leverage. The HCSF should continue to monitor vulnerabilities in the corporate sector and once enough data is available, evaluate the impact on the tools introduced on: resilience of the financial system; and corporate borrowing behavior. A sectoral systemic risk buffer, calibrated to corporate exposures, could be considered if vulnerabilities intensify. A fiscal measure that incentivizes corporates to finance through equity rather than debt would affect both bank and market-based finance. Such a measure would have an impact on the demand for credit, rather than its supply. The macroprudential policy toolkit should be strengthened further.

Keywords: ISCR; CR; member institution; BNP Paribas; HCSF dashboard indicator; home equity; market share; investment fund; banking sector; bank credit; sector risk; coordination role; banking system; bond market; Macroprudential policy; Systemic risk; Financial sector stability; Insurance companies; Macroprudential policy instruments; Global (search for similar items in EconPapers)
Pages: 39
Date: 2019-10-29
New Economics Papers: this item is included in nep-mac
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