Upcoming Trade Shows in France for Banking & Finance

The French banking sector stands on a firm foundation, significantly less vulnerable to the pitfalls that triggered the March 2023 crisis in the financial world. These vulnerabilities were rooted in poor risk management and unsustainable business models, which led to the failures of certain banks. While the turbulence in the markets generated concerns, the French financial system remained insulated due to its limited exposure to the affected institutions. It certainly helped that French banks are known for their robustness. It’s sustained by a strong prudential and supervisory framework within the Banking Union, following the international Basel III regulatory guidelines. Unlike the United States, where only a small number of banks adhere to these stringent requirements, in the European Union, all banks, regardless of size, are subject to these standards. The Single Supervisory Mechanism (SSM) in the euro area further bolsters the oversight of French banks as it conducts in-depth assessments and regular stress tests, including for interest rate risk. French banks continue to exhibit high solvency and liquidity as they adhere to interest rate risk regulations and maintain a solid funding structure, primarily reliant on stable deposits. However, they currently grapple with increased funding costs. These factors might temporarily impact profitability, but the medium-term outlook is brighter, thanks to the expected rise in interest rates. Insurers in the country maintain robust balance sheets but must adapt to an environment marked by higher interest rates. Inflation and higher interest rates affect different segments and entities in distinct ways. Non-life insurance segments could face elevated costs of claims and expenses, especially if benefit payments are spread over several years. In contrast, life insurers may encounter challenges due to an average return on assets that lags market returns. However, effective tax incentives for life insurance contracts are expected to mitigate significant outflows.