Financial stability

Post n°289

Paris maintains its rankings in FX and rate derivatives markets

Published on 11/04/2022

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By Amélie Robinette

In 2022, the Paris marketplace maintained its rankings in global foreign exchange and over-the-counter interest rate derivatives markets. Activity volumes in Paris have risen sharply over the past three years, driven by strong internationalisation and aided by growing digitalisation.

Table 1: France ranks 7th globally in the FX market and 5th in the interest rate derivatives market
Table 1: France ranks 7th globally in the FX market and 5th in the interest rate derivatives market Source: Banque de France for France, BIS for world data. Note: Daily volume of activity in the main financial centres (USD billions, at current exchange rates), gross data adjusted for domestic double counting.
Updated on 11/04/2022 08:46
Post n°286

The challenge of strengthening European financing for start-ups

Published on 10/14/2022

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By Boris Julien-Vauzelle, Camille Jehle, Jean-Baptiste Gossé

In 2021 and the first half of 2022, European start-ups raised record amounts and 68 of them gained the status of “unicorn”. Up to now, this dynamic has relied on the increasing involvement of US and Asian investors, particularly for late-stage funding rounds. This emphasises the need for the European Union (EU) to strengthen its own venture capital industry.

Chart 1: Investor origin by amounts raised by EU27 start-ups (2016-21)
Chart 1: Investor origin by amounts raised by EU27 start-ups (2016-21) Source: Banque de France calculations, based on Crunchbase data (at 31 July 2022). Note: The investors considered here are lead investors whose identity is known (see definition below).
Updated on 10/14/2022 15:54
Post n°284

Payment times still long in French overseas territories despite the health crisis

Published on 09/26/2022

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By Bruno Terrien

Late payments are a structural weakness of companies in the French overseas territories. By accelerating the recovery of trade receivables, the health crisis has led to a significant reduction in the cash flow needs associated with payment times. However, companies facing the longest payment times did not benefit from this improvement.

Chart 1: Differences in payment times between the French overseas territories and France
Chart 1: Differences in payment times between the French overseas territories and France Source: IEDOM – FIBEN database
Updated on 09/26/2022 08:42
Post n°283

The resilience of French SMEs two years into the Covid crisis

Published on 09/19/2022

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By Nicoletta Berardi, Benjamin Bureau and Frédéric Delamarre

This post assesses the financial position of French SMEs at the end of March 2022, i.e. two years after the start of the Covid-19 crisis, and at the very beginning of the war in Ukraine. It finds that the vast majority of SMEs have weathered the health crisis well, particularly by keeping their net bank debt under control.

Chart 1: Distribution of SMEs according to their level of net bank debt (as % of number of companies)
Chart 1: Distribution of SMEs according to their level of net bank debt (as % of number of companies) Source: Banque de France, Anacredit and ad hoc bank deposit database
Updated on 09/19/2022 08:43
Post n°280

The Hegemony of the Dollar from a Two-Century Perspective

Published on 07/21/2022

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By Roger Vicquéry

Recent geopolitical tensions have put the hegemonic role of the dollar, and its potential demise, back into the spotlight. Looking at a new long run measure of global currency competition over two centuries, no global currency leader has been able to sustain such a large lead over its competitors for such a prolonged period.

Chart 1: The Rise and Fall of Global Currencies over Two Centuries
Chart 1: The Rise and Fall of Global Currencies over Two Centuries Source: Vicquéry (2022). Global currency dominance GDP-weighted scores.
Updated on 07/22/2022 09:14
Post n°278

Green bonds: is their growth sustainable?

Published on 07/12/2022

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By Tamaki Descombes, Antoine Kergadallan and Quoc-Trieu Le

Issuance of green bonds has been growing at a fast pace in the past 10 years, mainly under the impetus of the European Union and its Member States, which are the world's largest issuers. We take a closer look at this market and explore the challenges it poses, together with the prospects going forward: interactions with monetary policy, investor appetite, greenwashing risk, etc.

Chart 1: Green bonds issued in accordance with the International Capital Market Association’s principles
Chart 1: Green bonds issued in accordance with the International Capital Market Association’s principles Source: BloombergNEF, authors’ calculations
Updated on 07/13/2022 08:37
Post n°276

Taking stock, two years after the launch of the PEPP

Published on 06/30/2022

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By Hadrien Camatte, Théophile Legrand and Aster Recoules

Net asset purchases by the Eurosystem under the Pandemic Emergency Purchase Programme (PEPP) were discontinued at the end of March 2022, two years after its launch. This programme successfully prevented the fragmentation of the euro area sovereign debt market in response to the Covid-19 pandemic and will continue to preserve the transmission of monetary policy through flexible reinvestment.

Chart 1: Reduction in fragmentation risk in the euro area since April 2020
Chart 1: Reduction in fragmentation risk in the euro area since April 2020 Source: Bloomberg, authors’ calculations. Note: Fragmentation is measured by the spread of the euro area GDP-weighted yield over the equivalent overnight indexed swap (OIS) rate.
Updated on 07/01/2022 09:43
Post n°272

Quality and Diversity of Research: a Ranking of Academic Journals

Published on 06/03/2022

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By Jean Barthélemy, Vincent Bignon, Régis Breton, Juan Carluccio and Gilbert Cette

In order to assess the quality of its research output, the Banque de France has constructed its own ranking of academic journals in economics and finance. The objective is to encourage the production of research on issues relevant to the Banque de France. This post explains the ten principles underlying the construction of this ranking.

Chart 1: Evolution of the number of authors of academic papers affiliated with one of the Eurosystem central banks on the REPEC website
Chart 1: Evolution of the number of authors of academic papers affiliated with one of the Eurosystem central banks on the REPEC website Source: Authors' calculations based on central bank ranking data from the REPEC website
Updated on 06/03/2022 08:36
Post n°271

The real effects of bank runs: France in 1930 and 1931

Published on 05/25/2022

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Eric Monnet, Angelo Riva and Stefano Ungaro

During the Great Depression, bank runs in France were characterised by a flight from banks to savings institutions, which were perceived as safer. Here, we identify and quantify the effects of these bank runs and analyse the conditions that led them to deepen the economic crisis.

Chart 1: Total deposits in banks and savings institutions, 1920-36
Chart 1: Total deposits in banks and savings institutions, 1920-36 Source : Baubeau, Monnet, Riva et Ungaro (2021)
Updated on 05/25/2022 09:02
Post n°266

AI and banks’ own funds: a new determination?

Published on 04/20/2022

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By Hyacinthe Buisson, Henri Fraisse and Matthias Laporte

The increasing use of artificial intelligence (AI) or machine learning (ML) techniques could allow banks to develop new credit risk models. These techniques could lead to substantial reductions in capital requirements. However, the opaque nature of these algorithms and the governance challenges they raise might make their adoption less attractive.

Chart 1: Neural network models could lead to substantial reductions in capital requirements
Chart 1: Neural network models could lead to substantial reductions in capital requirements Source: Fraisse and Laporte (2022) forthcoming in the Journal of Banking and Finance.
Updated on 04/20/2022 10:02

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