Sectors & markets

Annual financial Lunch, 23 November: The Economic Question

Francois Villeroy de Galhau, Governor of the Bank of France, was the distinguished speaker at this year’s event, where he explained the economic challenges ahead for Europe

Francois Villeroy de Galhau, Governor of the Bank of France, was the distinguished speaker at this year’s event, where he explained the economic challenges ahead for Europe

Established financial systems in Europe will need to change to meet the challenges that the UK’s exit poses to the sector.

Francois Villeroy de Gallau, Governor of the Bank of France, delivered this message in a speech to assembled guests at the French Chamber’s Annual Financial Lunch on 23 November at the Langham Hotel in London. He was introduced at the event by Estelle Brachlianoff, President of the French Chamber and Senior Executive Vice President of Veolia UK and Ireland.

Amid the opulent surrounding of the hotel’s ballroom, 120 guests heard the European Central banker and policymaker deliver his prognosis of the financial services and banking industry in a prepared speech.

The theme of his remarks was Europe, UK and France: facing our common economic challenges.

Villeroy was emphatic in his remarks that he would not comment on the political negotiations between the UK and the EU. However he did insist there was a consensus among European central bankers that British banks should not be afforded passporting rights to operate in Europe outside of a single market. He underlined the point that if British banks wish to do business in Europe, they will need to have a legitimate physical presence on the continent.

Reuter’s, who reported on the event, quoted Villeroy in saying that: ‘We are indeed going through a difficult period which puts the friendship between our countries to the test.’

Yet Villeroy was optimistic about Europe’s ability to meet the challenge. He noted that recent economic activity in the region has outperformed forecasts, in part due to the European Central Bank’s shifts on monetary policy.

He was equally bullish in his support for the proposed labour reforms in France. The French President Emmanuel Macron has recently pushed through large-scale changes to the labour market, including the decentralisation of collective bargaining rights for workers.

Villeroy said that the changes will reduce taxes and have a ‘significant’ impact on growth and development, reported Reuters.

Villeroy was appointed Governor of the Bank of France in 2015, after more than ten years in the private sector as Chief Executive Officer of Cetelem, and then as head of the retail banking activities of BNP Paribas in France and Chief Operating Officer of the BNP Paribas group.

Prior to that, he held posts at the French Treasury, and as advisor to the Minister of Finance and the Prime Minister Pierre Bérégovoy , then became financial advisor at the Permanent Representation of France in Brussels. He was head of the General Tax Directorate from 2000 to 2003.