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

_IMF Staff Country Reports, October 29, 2019_

## Source details

**Canonical URL:** [France: Financial Sector Assessment Program-Technical Note-Macroprudential Policy Framework and Tools](https://www.imf.org/en/publications/cr/issues/2019/10/28/france-financial-sector-assessment-program-technical-note-macroprudential-policy-framework-48763)

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## Bibliographic details
- Published: October 29, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513517803.002

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### Key findings
- 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 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 and would have an impact on the demand for credit, rather than its supply.
- The macroprudential policy toolkit should be strengthened further.

### Policy recommendations and considerations
- Evaluate effects of corporate-leverage mitigation tools once sufficient data is available.
- Continue monitoring corporate-sector vulnerabilities to assess need for additional macroprudential measures.
- Consider implementing a sectoral systemic risk buffer calibrated to corporate exposures if vulnerabilities intensify.
- Consider fiscal measures that incentivize corporate equity financing to influence demand for credit across bank and market-based finance.
- Strengthen the macroprudential policy toolkit to bring remaining tools within the HCSF’s legal domain or to improve coordination.

### Scope and thematic coverage
- Subject labels: Financial institutions; Financial sector policy and analysis; Financial sector stability; Insurance companies; Macroprudential policy; Macroprudential policy instruments; Systemic risk.
- Keywords include: bank credit; banking sector; banking system; BNP Paribas; bond market; coordination role; CR; Financial sector stability; Global; HCSF dashboard indicator; home equity; Insurance companies; investment fund; ISCR; Macroprudential policy; Macroprudential policy instruments; market share; member institution; sector risk; Systemic risk.

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## Content in this bundle

- **Executive Summary**
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_Source: https://www.imf.org/en/publications/cr/issues/2019/10/28/france-financial-sector-assessment-program-technical-note-macroprudential-policy-framework-48763_