Market Risk Policy of the Banks in France

Abstract

This paper studies the market risk policy and the current monetary and banking regime in France. The author has analyzed the role of inflation and other components of changing business cycle with respect to the government policies and market behaviour. The study allows us to evaluate how the different nature of the French monetary policies before 1999 as well as the convergence process towards the single currency have affected the role of inflation in the pricing of financial assets. The implementation of regulatory definitions in accordance with the Basel Accord (International Convergence of Capital Measurement and Capital Standard), are also discussed in the paper. The author has concluded his research by highlighting the current market sentiments of the credit risk policy of the banks in France.