9.6 trillion. CRB Is Responsible for Regulation

CRB, which is an independent committee, is responsible for developing regulations applicable to all credit institutions. Banking Law Divides Responsibilities for Authorization, Regulation, and Supervision Among Three Committees

Under the 1984 Act, the responsibility for bank authorization, regulation, and supervision is divided among three committees—the Credit Institutions Committee (CEC) has responsibility for authorization, the Bank Regulatory Committee (CRB) for regulation, and the Banking Commission (CB) for supervision. CEC Authorizes Banks

CEC is responsible for authorizing and licensing credit institutions to undertake banking operations. It also may withdraw authorizations and must approve any significant changes to a credit institution’s structure or ownership. 3). It is the duty of CB to ensure that credit institutions observe legal and regulatory requirements, as well as the industry’s rules of good conduct; to ensure that the rules of sound banking practice are observed; and to monitor the financial soundness of credit institutions. CB Obtains Information Through Permanent Oversight and Bank Inspections

The Banking Commission (CB) obtains information necessary to enforce compliance with regulations and assess the financial condition of credit institutions through a combination of permanent oversight and inspection visits conducted by separate sections within CB and the Bank of France. The Bank of France Has Other Bank-Related Responsibilities; AFB Administers Deposit Protection

In addition to its role in bank regulation and supervision, the Bank of France has responsibilities for other bank-related activities such as liquidity provision, crisis management, payments clearance, international negotiations, and lender of last resort. The French Bank Association (AFB) administers the system that protects deposits in French banks.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the French bank regulatory structure and its key participants.

What GAO Found

GAO found that: (1) three independent committees oversee bank authorization, regulation, and supervision in France; (2) the Credit Institutions Committee (CEC) is responsible for authorizing and licensing credit institutions, approving any significant changes to a credit institution's structure and ownership, and disapproving management changes; (3) the Bank Regulatory Committee (CRB) is responsible for developing the regulations applicable to credit institutions; (4) the Banking Commission (CB) is responsible for supervising all credit institutions authorized under the French Banking Act of 1984, monitoring the financial soundness of credit institutions, enforcing legal and regulatory requirements, and providing technical assistance to other supervisory committees; (5) the French bank regulatory system is cohesive in spite of having three regulatory bodies with distinct jurisdictions; (6) the Minister of Economic Affairs has an influential position in bank regulation and supervision because he is the Chairman of CRB and a member of CB and CEC; (7) CB obtains the information necessary to enforce compliance with banking regulations and is able to assess the financial condition of credit institutions by conducting permanent oversight and on-site inspections of financial institutions; (8) the Bank of France is responsible for bank-related activities, such as liquidity provision, crisis management, payments settlement, international negotiations, and lender of last resort; and (9) the French Bank Association administers the deposit protection program for its member banks.