The domestic economic policies of the new Trump administration could have an impact “ limit » on European inflation, but could have repercussions on interest rate markets. This is what the governor of the Bank of France, François Villeroy de Galhau, declared on Tuesday. He was speaking at a conference of the Prudential Control and Resolution Authority (ACPR).
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In this context, the senior official assured that European regulators will remain attentive to preserving the EU's competitiveness challenges. In particular, faced with a “ possible American exception » in the application of the Basel 3 rules, which govern the capital of banks.
“A wind of deregulation”
« A wind of deregulation seems to be forecast across the Atlantic », commented the one who is also a member of the board of governors of the European Central Bank (BCE). « Faced with a possible American exception, European supervisors and legislators will remain attentive to preserving fair competition rules between major jurisdictions », added the governor.
Before specifying: “ The European banking package offers certain instruments to adjust our regulations if necessary to competitiveness issues, in particular on market risks. »
This vigilance of the governor of the Bank of France is not without foundation. The arrival at the White House of Donald Trump, and his very protectionist program, indeed cast doubt on the application in the United States of the banking regulations resulting from the work of the Basel committee. Because during his first term, President Trump had already unraveled the rules imposed on banks after the 2008 crisis.
Launched in the aftermath of the bankruptcy of the American bank Lehman Brothers, the reform, known as Basel III, makes it possible to strengthen banks so that they are better resistant to financial shocks. And this, without calling on taxpayers to bail them out as was the case after the 2008 financial crisis.
Not the first warning
This is not the first outing from the senior public executive on the re-election of Donald Trump. Just after his election, during a conference in Lyon, the governor warned: “I believe that the result of the American election increases both the risks for the global economy and the need for European remobilization. »
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A Trump administration will result in “probably more protectionism”, “which means more inflation, at least in the United States, and a priori less growth everywhere in the world”underlined the central banker.
He also noted a US budget deficit, probably higher, which risks weighing on growth. “The American election must sound the European awakening”, After “a long numbness”had also declared François Villeroy de Galhau, emphasizing that “Europe is approaching this new situation with obvious weaknesses”whose “technological delay” and the “political division”.
Reassure the banks
Whatever the case, this declaration from François Villeroy de Galhau will surely reassure the banking sector, some of whose bosses were concerned about the consequences of the economic policy of the future American president.
It will be necessary, ” collectively in Europe be vigilant to ensure that the election of Donald Trump (…) does not create an increase in the differential requirements for regulation and supervision between the two continents », warned the chairman of the BPCE board, Nicolas Namias, at the beginning of November. And to urge Europe not to be “ naïve » on this point.
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« It is up to Europe to give itself the means to get its head back on track, to regain its competitiveness in all areas of the economy. In the field of banking, the supervisor must also pay attention to this key subject of competitiveness », Commented Daniel Baal, president of Crédit Mutuel on the professional social network LinkedIn, the day following the election of Donald Trump.
(With AFP and Reuters)
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