ECB’s Villeroy: French Banks to Feel the Impact of Rate Cut Less Acutely
29 May 2024
By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Wednesday said that the looming ECB interest rate cut would not be strongly felt by French banks due to their diverse business model.
Speaking at the presentation of the annual activity report of the French Prudential Supervision and Resolution Authority (ACPR) in Paris, Villeroy, who heads the Banque de France and the ACPR, said, according to a text provided, ‘The very specificities of the French model could now prove more advantageous: the impact of the future rate cut will be less pronounced. If the net interest margin of French banks is tighter, it is also more stable.’
‘At the same time, the other activities of a resolutely diversified model (investment banking, insurance, wealth management and asset management) could benefit from the normalisation of the rate environment, as well as the gradual economic recovery’, he continued.
The ECB would ‘most likely’ start easing monetary policy in the June Governing Council meeting, he said.