Philippe Brassac

CEO, Crédit Agricole

Interview

June 1, 2017

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philippe_brassac

PHILIPPE BRASSAC, CEO, Crédit Agricole

Since 2016 was an unpredictable year, some might take a pessimistic look at 2017, but instead the year has brought forth more clarity and optimism in businesses, says Brassac.

Philippe Brassac, the chief executive officer of Crédit Agricole shares with Biz@ India his optimism regarding businesses in 2017.

For the year 2017, what are your projections for the banking industry?

It seems that some uncertainties will prevail, however since the beginning of the year there has been some optimism in the business environment. This is quite surprising because everything that was foreseen in 2016 did not happen, be it the Brexit or the elections. It’s a bit as if the uncertainties were behind us. So objectively, today, there is this idea, that there is more optimism and clarity in business for the year 2017. Let us hope that this is really the case.

What is it fundamentally based upon?

It is based on two things. The first is that we had imagined, for example, that Brexit would be an immediate catastrophe for the markets, however that did not happen. Obviously, the case still weighs heavy for the future, in terms of negotiations. But at the moment, everything is going normally. Then there is the election of US President Donald Trump, who at least in the short term suggests a general policy truly focused on business with lesser regulations. However, uncertainties may persist perhaps in world trade but it isn’t dominating the scene. Also, there is this idea where a certain few think that business will be fine, eventually it will be. I think it comes from the coupling up of decisions that were not as problematic as anticipated with the President of the United States of America (US) asserting that business is his priority.

But, he means more of American business…

Yes, but here is a very concrete example. It will create inflation in US; it will also push up the interest rate a bit. And we know that in our economies, there was a little need for tensions on rates. These are the kind of examples of phenomena that are exported from US. When Americans want to invest on their territory, there are still many positive collateral effects because all businesses are linked across the globe. Agreed that these policies are quite centred on US but given the size and the influence of this country, for now, the changes should be rather positive for the rest of the world too.

How is the situation in Europe?

The situation in Europe is not bad. But with the negotiation of Brexit, we are coming to what we call the crossroads, i.e., the capacity for Europe to rebound politically post-Brexit or to continue to erode. So, the year 2017 is very important for the European Union. I hope that despite Brexit, this year will be for the emergence of a Europe that is stronger, more reliable, and that is also more pro-business.

What about the Euro? Will it remain strong or weaken again?

First, the Euro varies fundamentally in relation to world trade, and, its parity with the US Dollar does not directly reflect its strength or weakness, but rather the policies pursued by US. On the other hand, I consider that the Euro is a factor of stability in Europe, because it has allowed us to make it through the 2011 crisis. If that crisis were to be handled, one sovereign debt at a time, it would probably have been very problematic, it would have been likely that the markets attacked one country after the other. Here, the Eurozone is an important and significant zone. And the fact that we have a very strong control, the European Central Bank, overlooking all this, I think it is a factor of stability and strength for the European countries.

 

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