Financial Stability Report, December 2025 (Banque de France)

Summary

• The ECB held its policy rates unchanged between June and December 2025, at 2% for the deposit facility, 2.15% for main refinancing operations and 2.40% for the marginal lending facility.p.8
• The HCSF kept the countercyclical capital buffer rate at 1%.p.8
• The IMF raised its 2025 global growth forecast to 3.2%, from 2.8% expected in April.p.11
• French growth is expected at 0.9% in 2025, down from 1.1% in 2024, and at 1% in 2026 and 2027.p.11
• The French public deficit is expected at -5.4% of GDP in 2025, while the debt-stabilising balance is estimated at -2.1%.p.15
• Net issuance of French medium and long-term sovereign debt was estimated at 136 billion euros in 2026.p.17
• Pension funds hold $56,000 billion of assets under management worldwide, and Dutch pension funds about €1,900 billion at end-2024.p.14

Key insights

1. Dutch pension funds held about 9% of French debt with maturity above twenty years in the first quarter of 2025.p.14
2. The ECB's Governing Council confirmed inflation returning to its 2% medium-term target.p.8
3. Valuations of risky assets recovered strongly after the correction triggered by the US tariff announcement of 2 April 2025.p.4
4. Beyond a 5% deficit, French public finances would enter a danger zone with increased risks of a sudden reversal in the sovereign debt market.p.16
5. French banks' exposure to non-bank financial intermediaries has grown faster than the size of their balance sheets since 2022.p.6
6. The report was closed on 31 December 2025.p.3