Nicolas Véron

From Supervision to Resolution: Next Steps on the Road to European Banking Union

This policy note was published last Friday by the European Parliament in anticipation of their "Monetary Dialogue" hearing of ECB President Mario Draghi yesterday (other papers prepared for the same occasion are here). It was republished today by Bruegel and the Peterson Institute in their respective policy series. The content of the three versions (European Parliament, Bruegel, and PIIE) is identical. 

In the note, Guntram Wolff and I provide an in-depth analysis of the sequence defined by the European Council in mid-December to complete Europe’s banking union, starting from the first step of creating a Single Supervisory Mechanism (SSM) hosted by the European Central Bank. We make specific recommendations on the successive steps, including the finalization of the SSM Regulation, other pieces of EU legislation (Capital Requirements Regulation, Bank Recovery and Resolution Directive, Deposit Guarantee Schemes Directive), the operational framework that will enable the European Stability Mechanism to recapitalize banks directly, the future “Single Resolution Mechanism” that is intended for discussion later this year and in 2014, and further steps at an even later stage.

We also make the point that policymakers should take decisive action to restore trust in the European banking sector before the Single Resolution mechanism is finalized, because the economic cost of waiting at least 18-24 more months would be simply too high. Article 27(4) of the SSM Regulation in particular provides a unique opportunity for a proactive, system-wide initiative for the assessment and restructuring of Europe’s banks in late 2013 / early 2014. 

The note was presented to the press this morning. Click here to listen to the conversation as recorded on the Peterson Institute's website. 

In case the above links do not work, the note can also be downloaded directly here as published by the European Parliament, by Bruegel, or by the Peterson Institute. 

Briefing Paper for the European Parliament

On October 4, I was invited to present a briefing paper at a meeting of the Economic and Monetary Affairs (ECON) committee of the European Parliament, in preparation of their hearing of European Central Bank President Mario Draghi the following week. the paper is about the European initiative to create a banking union and more specifically the European Commission's proposals for A Single Supervisory Mechanism and related reform of the European Banking Authority, published on September 12.

Bruegel later published a lightly edited version of the same paper in its Policy Contribution series, available here. The paper is also available on the European Parliament's website.

December 11 update: an updated and slightly expanded version was also published by the Peterson Institute (PDF version here)

 

The Political Redefinition of Europe

On June 8, I was invited by Sweden's Financial Markets Committee (FMK) to give opening remarks at a conference they organized in Stockholm about the role of the European Parliament. I used this occasion to collect some personal thoughts on the political and historical dimensions of the Eurozone crisis.

The text is available here as published by FMK, here as published by PIIE, and here as republished on the Bruegel Blog - or alternatively here in PDF format. 

An Assessment of Financial Reform - So Far

I contributed this article to a forthcoming book co-edited by Barry Eichengreen (UC Berkeley) and Bokyeong Park (KIEP). The piece attempts to assess the financial reform induced by the crisis so far, and to see the forest for the trees - a challenging task given the multiplicity of reform initiatives and the unfinished nature of most of them. 

Click here for the version published in the PIIE Working Paper series. 

Click here for the version published in the Bruegel Working Paper series. 

Policy Contribution on Credit Rating Agencies

This policy contribution was simultaneously published by Bruegel and published by the Peterson Institute. In it, I summarize the European debate on credit rating agencies, the problems they pose and some possible solutions. I warn against the unintended consequences of ill-designed regulation, and suggest that the most important issue in this debate is to improve the quality and scope of issuers' public disclosures about their financial risk factors. 

US Senate Testimony: the European Debt and Financial Crisis

On 22 September, I was a witness at a hearing of the Subcommittee on Security and International Trade and Finance of the US Senate Committee on Banking, Housing, and Urban Affairs. My written statement is accessible here, and a webcast of the entire hearing including my oral testimony and questions is here. 

Click here for the publication in Bruegel's Policy Contribution series. 

Click here for the publication on the Peterson Institute's website. 

Keeping the Promise of Global Accounting Standards

This is published with much delay, due to technical problems with TypePad. In July Bruegel and the Peterson Institute published my policy brief on the future of International Financial Reporting Standards (IFRS), in which I make policy recommendations as regards both the governance of the IFRS Foundation and the implementation of the standards in individual jurisdictions. 

Click here for the Bruegel version; 

Click here for the PIIE version. 

Too Big To Fail: The Transatlantic Debate

 

The Peterson Institute and Bruegel published this Working Paper, in which Morris Goldstein and I analyze historical and structural differences between the US and EU, which help explain the differences in policy debates and decisions on the "too-big-to-fail" problem which lies at the core of current prudential regulatory debates.

Click here for the PIIE version in PDF if the above link does not work, and click here for the Bruegel version as published in early February.

Update: Morris and I later published a summary of the argument for Vox and NRC Handelsblad.  

EU Financial Regulatory Reform: A Status Report

 
Bruegel just published the text of a paper I presented at the Brookings Institution last week, as part of a discussion co-sponsored by the Heinrich-Böll Foundation on current financial policy challenges. In this piece, I analyze the differences in the timing of the regulatory response on both sides of the Atlantic, and briefly outline challenges ahead for the EU.

Click here to read the paper, or click here to upload it from Bruegel's website.

The paper was originally published by Brookings and also later by the Peterson Institute.

Not All Financial Regulation Is Global

Bruegel today published a policy brief by Stéphane Rottier (Adviser at the National Bank of Belgium) and myself, in which we look at how the crisis has changed the conditions of the global financial regulatory debate.

We identify key new trends and make corresponding recommendations to global leaders, with an emphasis on the subsidiarity principle and on keeping capital markets globally integrated.

To support the analysis we simultaneously produced a policy contribution which was also published today by Bruegel.

Update: the paper was later published, with a few improvements, by the Peterson Institute.