Nicolas Véron

The CIty of London: Turbulence Ahead

With the financial crisis, the likely advent of a Eurosceptic conservative UK government next spring, and the growing threat of a reversal of cross-border financial integration, the City of London's strategic environment is changing at a rapid pace.

Click here to download the column, which is also published by the Peterson Institute for International Economics, where I am now a Visiting Fellow (as well as a Senior Fellow at Bruegel). As usual, publication in various newspapers, including La Tribune and Forbes Russia, is forthcoming.

Global Accounting Convergence: A Race to the Bottom?

I forgot last month to post this piece, published in the Accountancy Column of the Financial Times. Just before the Pittsburgh Summit of the G20, I looked at convergence between the two main remaining systems of accounting standards (IFRS and US GAAP), and conclude that the current convergence process is becoming increasingly dysfonctional.

Click here to download the piece, which correctly predicted that a reaffirmation of the convergence goal would be the main thing the G20 leaders would have to say about accounting in Pittsburgh.

The unfinished job of restructuring Europe's banking system

Click here to download my October column, which builds again on the policy brief I co-authored with Adam Posen in June and argues that the European banking sector still needs comprehensive sorting out and restructuring for orderly credit conditions to be restored. Especially since the September general election, Germany has a pivotal role to play on whether this will happen or not. If not, the price will be a crippling drag on EU growth rates in the foreseeable future.

The piece was published on 19 October online by Caijing, on 20 October by Boersen-Zeitung as part of a special series on 'a new order for financial markets', on 26 October by La Tribune, on 12 November by Referans, and on 14 November by Cinco Dias.

The EU and Financial Regulatory Reform

This month, Financial World, the City of London's monthly magazine published by the ifs School of Finance and produced by CSFI, has commissioned five articles on what will change in financial regulation as a consequence of the crisis.

Click here to download my piece, the first of the series. I argue that the EU has lost the opportunity it had last year to take the lead in defining the new regulatory framework, but that it is probably making progress in fixing its own institutional gaps.

Europe's Oligarchs

Earlier this year, Simon Johnson's article in the Atlantic Magazine stirred a debate in the US on whether the power of the 'financial oligarchy' had been a determining factor in the crisis. In this month's column, I look at the corresponding situation in Europe. Here too, oligarchies play a big role and we would gain from more public discussion of it.

Click here to download my column in English, which was published on 7 September by Czech Business Weekly and on 17 October by the Australian Financial Review, as well as on 2 September by Caijing, on 19 September by La Tribune, and on 29 September by Forbes Russia. 

Bruegel's Memos to the Next Commission

 

Yesterday, Bruegel published Memos to the new Commission, a collection of essays by Bruegel scholars on the key policy challenges and priorities the European Commission will face over the next five years. I contributed the memo on Financial Services Policy, and coauthored the one on Enterprise and Industrial Policy together with André Sapir.

Click here in case the above link is broken.

FT Comment Piece on European Bank Treuhand

This morning the Financial Times published a comment piece by Adam Posen and myself, in which we briefly outline the proposal of our policy brief 'A Solution for Europe's Banking problem', that a number of European states should jointly create a trustee to manage the triage, restructuring and resolution processes that are indispensible to heal the European banking system.

Click here to download the piece if the above link does not work.

A 'Treuhand' To Solve Europe's Banking Problem

 

In a new Bruegel Policy Brief co-authored with Adam Posen, we describe 'Europe's banking problem' as a high reliance of the European economy on a badly damaged banking system. History confirms the only way to solve it is 'triage', i.e. differentiation among banks on the basis of their actual capital position assessed through a consistent process and publicly disclosed, then restructuring of those banks which would not subsequently succeed to meet their capital needs.

But in continental Europe, advanced cross-border integration means that triage and restructuring cannot be effective if conducted only at national level. As no existing supranational institutions can realistically do the job, we advocate the creation of a temporary fiduciary agency or 'Bank Treuhand' by a critical mass of European countries. The Treuhand would assess major banks' balance sheets and publish triage results, catalyse restructurings by being a broker for negotiation among national governments, and manage distressed assets that would be brought into public ownership as the result. It would also buy time, and pave the way, for the longer-term task of reforming the EU's supervisory architecture in order to make cross-border banking sustainable.

Click here to download and read the Policy Brief as published by Bruegel (only in English).

Click here to read the piece as published by the Peterson Institute for International Economics on 16 June 2009.

European Commission Hamstrung by Lack of Vision

In this piece for the E!Sharp website, I argue that the European Commission is not so much to blame for its decisions (or lack thereof) since the start of the crisis, than it is at fault for not providing a vision of Europe's financial system to other policymakers and the public. The lack of long-term direction is a particularly severe shortcoming in a time of turmoil, which creates so many opportunities for policy mistakes.

IFRS Stress Test - in Vox

Vox, the economics debating website, has published an updated English version of my piece of last Monday in La Tribune.

Click here to download the piece in case the above link is broken.