Section 2: The High Council for Financial Stability

Without prejudice to the respective powers of the institutions that its members represent, the Haut Conseil de stabilité financière supervises the financial system as a whole, with the aim of preserving its stability and its ability to make a sustainable contribution to economic growth. In this capacity, it defines macroprudential policy and carries out the following tasks:

1° It ensures cooperation and the exchange of information between the institutions that its members represent, as well as between these institutions and itself. To this end, the Autorité de contrôle prudentiel et de résolution and the Autorité des marchés financiers may transmit to it information covered by professional secrecy;

2° It identifies and assesses the nature and extent of systemic risks resulting from the situation in the financial sector and markets, taking into account, in particular, the opinions and recommendations of the competent European institutions;

3° It shall formulate any opinions or recommendations likely to prevent any systemic risk and any threat to financial stability. It may make its opinions or recommendations public;

4° It may, on a proposal from the Governor of the Banque de France, require the persons mentioned in 1° and 9° of A of I of Article L. 612-2 as well as the persons defined in Article L. 533-2-1 to implement a counter-cyclical cushion provided for in 1° of II of Article L. 511-41-1 A and in Article L. 533-2-1 ;

4° bis It may, on a proposal from the Governor of the Banque de France, require the persons mentioned in 1° and 9° of A of I of Article L. 612-2 and the persons defined in Article L. 533-2-1 to set up a systemic risk cushion provided for in 4° of II of Article L. 511-41-1 A and in Article L. 533-2-1 ;

4° ter It may, on a proposal from the Governor of the Banque de France, Chairman of the Autorité de contrôle prudentiel et de résolution, take the measures provided for in Article 458 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013, with regard to the undertakings to which that Article applies and with regard to finance companies;

5° It may, on a proposal from the Governor of the Banque de France and with a view to preventing the emergence of excessive upward movements in asset prices of any kind or excessive indebtedness on the part of economic agents, set conditions for the granting of credit by entities subject to the supervision of the Autorité de contrôle prudentiel et de résolution or the Autorité des marchés financiers and authorised to carry on this activity, when these entities grant loans to economic agents located on French territory or intended for the financing of assets located on French territory;

5° bis It may, on a proposal from the Governor of the Banque de France, Chairman of the Autorité de contrôle prudentiel et de résolution, adjust the rules for establishing and reversing the provision for profit sharing for all or a subset of the persons mentioned in 1°, 3°, 5° and 9° to 11° of B of I of Article L. 612-2 ;

5° ter It may, on a proposal from the Governor of the Banque de France, Chairman of the Autorité de contrôle prudentiel et de résolution, after obtaining the opinion of the supervisory board of that authority, with regard to all or a sub-set of the persons mentioned in 1° to 5° and 9° to 11° of B of I of Article L. 612-2, in order to prevent risks representing a serious and serious threat to the financial situation of all or a significant sub-set of these persons or to the stability of the financial system, take the following protective measures:

a) Temporarily limit the exercise of certain operations or activities, including the acceptance of premiums or payments ;

b) Temporarily restrict the free disposal of all or part of the assets;

c) Temporarily limit the payment of surrender values for all or part of the portfolio;

d) Temporarily delay or limit, for all or part of the portfolio, the right to arbitrate or the payment of policy loans;

e) Temporarily limit the distribution of dividends to shareholders, the remuneration of mutual or parity certificates or the remuneration of members' shares to members.

The High Council for Financial Stability decides on the measures provided for in this 5° ter for a maximum period of three months, which may be renewed if the conditions which justified the introduction of these measures have not disappeared, after consulting the Consultative Committee for Financial Legislation and Regulation. The measures provided for in c of this 5° ter may not be maintained for more than six consecutive months.

In its decision, the Haut Conseil shall ensure that financial stability and the interests of policyholders, members and beneficiaries are protected;

6° It may address any opinion to the competent European institutions with a view to recommending the adoption of measures necessary to prevent any systemic risk threatening the financial stability of France;

7° It facilitates cooperation between the institutions represented by its members in drawing up international and European standards applicable to the financial sector and may issue opinions on this subject.

In carrying out its tasks, the Haut Conseil de stabilité financière takes account of financial stability objectives within the European Union and the European Economic Area. It cooperates with counterpart authorities in other Member States and with the relevant European institutions.

The Minister responsible for the economy, the Banque de France, the Autorité de contrôle prudentiel et de résolution, the Autorité des marchés financiers and the Autorité des normes comptables shall ensure that the decisions of the High Council for Financial Stability are implemented as far as they are concerned.

The Governor of the Banque de France may decide to make public the proposal it makes under 4° to 5° ter of this article.

The decisions of the High Council for Financial Stability referred to in the same 4° to 5° ter may be the subject of an action for annulment before the Conseil d'Etat.

The decisions mentioned in 4°, 4° bis, 5° bis and 5° ter are published.

A decree of the Conseil d'Etat shall specify the conditions of application of this article.