III.-3.3: Madame Christine Lagarde, Finance Minister presents the goals of the "Autorité de contrôle prudentiel - ACP" (French Prudential Control Authority)

The speech given by Madame Christine Lagarde, Finance Minister, on the occasion of the inauguration of the Autorité de contrôle prudentiel (ACP – Prudential Control Authority) is based on the realization that French regulation functioned well during the financial crisis. She emphasizes, however, the necessity of drawing lessons from this crisis and of redesigning regulatory systems with efficiency and ambition. The implementation of the ACP comes in answer to this desire of ambitiously reforming banking supervision and creating a system to serve as a reference on the subject.

Four principal objectives are set for this “super-authority”: (i) successfully merging the banking and insurance regulatory systems, (ii) succeeding in overcoming the crisis, (iii) successfully reforming the international financial system, and finally (iv) protecting consumers. More generally, the Authority should ensure financial stability and solidity in a delicate and changing environment, while protecting consumer interests.

In this context, the reforms in banking regulation instituted by the Basle 3 and Solvability 2 agreements as well as a number of mergers in the insurance industry, are all factors that have to be taken into account. Therefore, on the international level, especially within the G20, the ACP is in charge of supervising the reinforcement of the stability of the financial sector, especially as concerns the elaboration of the Basle 3 agreement: more equity for risky activities, and better-quality equity, reducing pro-cyclical effects and better managing liquidity. Similarly, the reform operated by Solvability II is intended to protect insurers’ investments in business. Furthermore, the ACP is in charge of representing France within European institutions, and will currently have to intervene in two pending bills before the European Parliament: The European Banking Authority and the European Insurance and Occupational Pensions Authority, whose creation was proposed last autumn by the European Commission, in order to redefine the architecture of financial supervision in Europe.

Finally, consumer protection is at the heart of the ACP’s missions, and amongst the principal goals of its regulatory activities. Meeting clients’ needs with loyalty is clearly identified as one of the Authority’s major objectives. To this effect, the ‘common pool’ created with the Autorité des marchés financiers (Financial Markets Authority) is the occasion to develop expertise and a common policy with regards to commercial practices, in cooperation with the DGCCRF (General Directorate for Competition, Consumer Affairs, and the Repression of Fraud), traditionally in charge of verifying the loyalty of commercial practices.