François Villeroy De Galhau: New Year Wishes to the Paris Financial Centre

Why It Matters

The milestones signal effective monetary and fiscal coordination, reinforcing investor confidence in France and bolstering Paris’s status as a leading European financial hub.

Key Takeaways

• Key‑rate cuts reached neutral 2% by summer 2025.
• Deficit fell to 5.4% of GDP, meeting target.
• Growth held at 0.9% avoiding recession.
• Mortgage lending surged 35% in 2025, boosting banks.
• Paris financial centre gains credibility from resilient economy.

Pulse Analysis

The Bank of France’s achievement of a neutral 2% policy rate by mid‑2025 reflects a broader European shift toward tighter monetary conditions after years of ultra‑low rates. Villeroy de Galhau’s acknowledgment of this milestone signals that the ECB’s transmission mechanisms are working, providing a stable backdrop for credit markets and reinforcing the eurozone’s credibility among global investors. For Paris, this stability translates into lower funding costs for banks and corporates, encouraging cross‑border capital flows into the city’s financial ecosystem.

Fiscal discipline complemented monetary easing, with France’s primary deficit contracting to 5.4% of GDP, aligning with the government’s consolidation roadmap. Despite a modest 0.9% growth rate, the avoidance of recession demonstrates the economy’s underlying resilience amid political turbulence and external shocks. This fiscal trajectory reassures bond markets and rating agencies, potentially lowering sovereign borrowing spreads and attracting institutional investors seeking stable Euro‑area assets.

The 35% jump in new mortgage loans in 2025 showcases the dynamism of France’s housing finance sector, fueling bank profitability and expanding balance‑sheet assets. Such credit expansion, driven by strong consumer confidence and supportive regulatory frameworks, positions Paris as a hub for innovative financing solutions. Looking ahead, sustained lending growth and prudent policy coordination are likely to cement the city’s role as a premier European financial centre, drawing talent, fintech ventures, and international capital.

François Villeroy de Galhau: New Year wishes to the Paris financial centre

Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de résolution (ACPR) · Paris, 12 January 2026

Madam Minister, Ladies and gentlemen Presidents and Secretaries General, Ladies and gentlemen, dear friends,

First, alongside the Banque de France and the ACPR, I would like to extend our warmest wishes to you, our day‑to‑day partners: public officials and elected representatives, the financial community and entrepreneurs, journalists. Thank you for being here, on behalf also of Denis Beau, Jean‑Paul Faugère and Nathalie Aufauvre.

The past year can be summed up with the simple phrase: “Private happiness, public disorder.” For 2026, I wish you and your loved ones much personal happiness. As for the public disorder, it would be risky to expect it to diminish; but I wish us all the courage to remain steadfast in our state duties and to uphold our convictions. Resilience and hope are undoubtedly the two leading virtues of our time; in recent years we have strengthened the former, so let us hold on to the latter for the future.

To start with, a quick look back at 2025 by returning to three wishes I made before you last year and that have come true.

1. I wished for a year of key‑rate cuts in Europe and that we might reach the neutral rate of around 2 % by the summer of 2025: that is precisely where we have been since June last year.

2. An initial – modest – decline in France’s deficit, to 5.4 % of GDP for 2025: that should be the case.

3. A year without recession: French growth has proved resilient, albeit insufficient, at 0.9 %, despite the instability in our political landscape and in the international environment.

Credit for this should go above all to the tenacious commitment of our entrepreneurs and the work of the French people. I commend them, as well as the mobilisation of our financial system – banks and insurers – at their service, which is one of France’s strengths. The recovery in lending for house purchases, with a 35 % rise in new loans in 2025, is an example of this.

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The views expressed in this speech are those of the speaker and do not necessarily reflect those of the BIS.