France: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis

The French financial sector has proven resilient to the stress events of the last five years but faces some headwinds from domestic and, like in many other countries, global uncertainty. Despite high external and domestic uncertainty, sovereign debt markets have functioned well, and large debt issuance continues to be smoothly absorbed by a deep and well diversified buyer base. Banks have pre-funded part of their upcoming roll-over needs. Credit growth has moderated, and the housing market is undergoing an orderly adjustment, as household and non-financial corporates (NFC) debt remain elevated. The stability of the French financial sector is an important element of strength in the context of domestic uncertainties in a politically challenging environment, while global geoeconomic risks are on the rise.