MONETARY POLICY

Patience Is a Virtue

Francois Villeroy de Galhau, governor of the Bank of France, pauses during an interview during a Banque de France symposium in Paris, France, on Tuesday, Jan. 12, 2016. The European Central Bank has the tools available to act further if needed, as inflation is still below target, Governing Council member Villeroy said. Photographer: Marlene Awaad/Bloomberg *** Local Caption *** Francois Villeroy de Galhau
The governor of France's central bank is optimistic that the Italian banking crisis won't spread to his country.
  • Why it matters

    Why it matters

    Europe’s response to the global financial crisis was to prevent worse things for the economy, like the Great Depression in the 1930s, said Mr. Villeroy de Galhau.

  • Facts

    Facts

    • The rate of return on German savings accounts has been positive since 2015, said Mr. Villeroy de Galhau. Before that, it was negative.
    • The European Central Bank’s inflation target was set by mutual agreement in 2003 at just under 2 percent.
    • Today that rate is the consensus of all major central banks, including the ­U.S. Federal Reserve, the Bank of England and Bank of Japan.
  • Audio

    Audio

  • Pdf

Late on Friday night, the European Central Bank will publish the latest round of stress test results gauging the health of Europe’s banks. Much of the focus has been on Italy, but what about neighboring France?

Shortly before the results were published, the governor of France’s central bank said he isn’t worried that the Italian banking crisis could spill over into his country.

“The French banking system is extremely sound,” said François Villeroy de Galhau, in an exclusive interview with business weekly WirtschaftsWoche, a sister publication of Handelsblatt.

Mr. Villeroy de Galhau was appointed head of the Banque de France in September 2015. He is descended from the family that co-owns the Villeroy & Boch ceramics company, located for two centuries across the French border in the Saarland region of Germany.

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