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July 2017

We are Paris

Marie-Anne Barbat-Layani

On the 7 July 2017, the mobilisation of the government and public authorities in Paris and the Île-de-France region sent another strong signal to the stakeholders in the Paris Financial Centre as well as those interested in moving in or developing their business there.

The banking industry, with its subsidiaries in insurance and asset management, is one of the principal assets of the Paris Financial Centre. France is fertile soil for banking activities. This is evidenced by the fact that France is home to four of the nine most powerful banks in the Eurozone, and hosts more than a hundred of foreign banks. Performing and innovative, the French banks animate a booming FinTech ecosystem. The presence of major clients rounds out its appeal. And now, this momentum is being bolstered by "a French economy that is showing solid growth, which is not expected to weaken before the end of the year", according to the most recent economic report by INSEE, the French national statistics office.


For the moment, the international banks in London are hesitant to take the leap and choose Paris for their new European location. In their view, France lacks predictability and stability in economic, fiscal and social policy. Hopefully, the proactive approach taken by the public authorities, combined with the latest announcements addressing the main obstacles to the development of their business in France, will be able to convince them.


They also need to be convinced of the credibility of commitments on tax and social security charges, as France's track record is not perfect in this regard. The recent episode with the C3S special social solidarity contribution, which was slated to be repealed over three years as part of the Responsibility Pact until plans changed midway, is unfortunately imprinted on people's minds. The budgetary stance taken in September will be followed closely.


France's major banking groups, as well as their market and asset management operations, naturally already have a major presence in Paris, with nearly 58,000 direct employees. And they will obviously choose Paris as the site to relocate their London-based teams within the European Union. This could impact around one thousand jobs with ripple effect of at least three indirect jobs for one direct job. But the size of the incoming teams will also depend on regulatory decisions regarding the exercise of financial activities within the European Union, regulations on market activities and the location of market infrastructure, which are major considerations.


The new government therefore needs to continue to equip itself with the means to enable the Paris Financial Centre to become the new hub of excellence for European finance.
Marie-Anne Barbat-Layani
Chief Executive Officer of the French Banking Federation

Tweeter : @FBFFranceTweeter : @FBFFrance

Our Positions

Cybersecurity: let's be serious
The Revised Directive on Payment Services (PSD2), which allows new entrants to freely access payment accounts, brings up security issues that are often poorly understood. While the directive will enter into force on 13 January 2018, the security standards needed to accompany the regulations will not be in place earlier than mid-2019 at the earliest. This is simply irresponsible given the growing risk of cyberattacks, which have become increasingly powerful. The directive's implementation should therefore be postponed to make both dates coincide. Furthermore, these security standards should not be tampered with. The European Banking Authority developed them in an expert manner, and the European institutions (Commission, Parliament and Council) should therefore adopt them without introducing any changes, as the impacts on overall security would be impossible to predict. As such, the FBF supports the creation of a reliable and effective ecosystem of interoperable interfaces (API) to ensure reliable communication between new entrants and banks. These modern and secure interfaces make it possible to place all players on an equal footing. The confidentiality of client data, cybersecurity and innovation will be compromised if the practice of web scraping (a technique that enables third parties to access the bank accounts of clients in their names and thereby impersonate them using their access codes) continues to persist after PSD2 comes into effect. Banks will never compromise when it comes to security!

The bank as an active employer
The French banking sector continues to be dynamic in the labour market, adding more than 41,000 jobs in 2016. These jobs are long-term, with two out of three new positions offered on a permanent contract (compared to two out of 10 on average on the national level). They also increasingly demand higher skills, with postgraduates (Bac +4/5) now accounting for more than half of all recruits. Women are also increasingly represented: one out of two bankers is a woman, as are 47.1% of managers. Training is a major priority, representing 4.3% of the total payroll (compared to 2.7% on average at French companies). Recruitment is occurring in compliance and IT as well as client-facing jobs like client advisors (for individual, professional and business clients), which accounted for four out of every 10 new hires in 2016. Finally, 6,300 work placement new contracts were signed in 2016.

The Capital Markets Union should be revived
The FBF used the opportunity of the European Commission's (EC) publication of its mid-term analysis of the Capital Markets Union (CMU) action plan, launched in 2015, to reiterate its support for this initiative. French banks are among Europe's leading financing and investment banks and play a major role in the financing of the European economy. To take into account the impact of Brexit and banking regulations calling for greater market financing, it is essential to conduct a strategic review in Europe. The FBF suggests that the EC organise such a review process by bringing together prominent individuals in the form of a "committee of the wise" that would define broad guidelines to promote the revival of the CMU.

In their own words

Monday, 26 June 2017 - Guillaume Poupard, Director of the ANSSI (French cybersecurity agency), in a TV interview on “acteur public TV”.
06/26/2017
There needs to be extremely close coordination between those who think about digital technology and those who think about digital security.

FBF in the media

14 June 2017 - Marie-Anne Barbat-Layani: “Basel 4: Are French Banks Reluctant?” Le Monde (also published by Les Echos, Reuters, La Tribune and Agence France-Presse)

6/14/2017

Prior to the meeting of the Basel Committee which took place in Sweden, the FBF’s CEO shared her concerns: “It was clever of the Americans to focus the discussion with the Europeans on what the floor should be, and no longer on whether it should exist”. According to an estimate by the FBF, the impact of these measures would be negative for financing. “With regard to housing loans—which amount to just under €1 trillion in assets on French banks’ balance sheets—if the floor were to be set at 70%, the cost of equity would be three times higher for banks. For aircraft financing, the cost would even be four times higher.” The same rules do not produce the same effects on the balance sheets of banks and the financing of the economy on both continents. “There's a competitive aspect to this. The United States wants a floor that would penalise European banks.”

If you'd like to know more, the FBF has published a memo on “the Basel Accords and their Consequences for the Economy”

8 to 10 July 2017 – Les Rencontres Économiques d’Aix-en-Provence

7/8/2017

Marie-Anne Barbat-Layani, CEO of the FBF, attended the Rencontres d'Aix 2017 forum and took part in a session titled “How Far Can Disintermediation Go?” as part of the event's “Financing” track. The FBF's CEO spoke about two aspects to financial disintermediation, focusing on “de-leveraging” and the “bookingisation of banks”, and called for an economic and political examination of these issues.

Read Marie-Anne Barbat-Layani's column, published especially for this event, and watch a video recording of her speech

8 July 2017 – France Culture: “10 years after the financial crisis, regulations have been put on hold”.

7/8/2017

Benoît de La Chapelle, Deputy CEO of the FBF, participated in a debate alongside Jézabel Couppey-Soubeyran, a lecturer at Université Paris 1 and Dominique Plihon, a professor of financial economics at Université Paris 13. At the debate, he spoke about the various measures implemented since 2008 to strengthen the sector and prevent another crisis. The French banking sector has been strengthened, with French banks doubling their equity capital between 2008 and 2015. He also emphasised that any regulations governing equity capital could have consequences on banks’ ability to finance the economy. And the challenge today is choosing our model of financing against international competition, particularly from the United States. This is a political issue that needs to be taken up at the right level. “The European Union must reaffirm its choices and its financing model. That means that in ongoing negotiations in Basel, we shouldn't apply the “Anglo-Saxon” model, and instead adapt prudential rules to the way the economy is financed. That's what not being naive means!”

Listen to a recording of the programme

Agenda

August
29/30

MEDEF summer university, Paris.

September
1

Jean-Laurent Bonnafé becomes Chairman of the FBF for one year.

September
7

ECB monetary policy press conference, Frankfurt.

September
15

Eurogroup, Tallinn (Estonia).

September
20/21

“Digital Revue Banque” workshop, Paris. Presentation of the RB Innovation award by Marie-Anne Barbat-Layani.

Tweet of the month

Figure of the month

The Basel Accords and their Consequences for the Economy
@FBFFrance

In 2016, banks have recruited 6300 new apprentices. They are in addition to the 8300 apprentices already working in the banks at the end of 2016