Nicolas Véron

More Data on Corporate Demographics

Bruegel just published The Demographics of Global Corporate Champions, a new working paper and public dataset in which I look more closely at the birth dates of the world's 500 largest companies (based on the FT Global 500 ranking by market capitalisation, September 2007).

Among other things, this novel database shows strinking differences between corporate demographics in Europe and Japan, where large companies tend to be old, and the US, which retains a significant ability to give birth to a steady flow of "new giants". I had already mentioned these results, especially in a Policy Brief in January and a column in March. But this is the first comprehensive presentation of the underlying data.

Download BruegelWorkingPaper_Jul08.pdf to read the working paper from this website.

In French: Download OpinionEuropeenne_2008.pdf to read  an abridged version which was published in April 2008 in L'Opinion Européenne en 2008, a volume edited by Dominique Reynié and published by Lignes de Repères and the Robert Schuman Foundation.

Reforming the Governance of International Accounting Standard-Setting

Bruegel just published my comments on the International Accounting Standards Committee (IASC) Foundation's proposal to reform its governance arrangements, following a consultation meeting in which I participated in London on 19 June.

In my contribution I recommend more recognition of investors and other capital-markets users of financial information in the future governance framework, as well as a more meaningful public consultation process -- this governance reform may sound arcane but it will probably have a large impact on the future shape of international accounting standard-setting.

Download BruegelPolicyContribution_Jul08.pdf to read this piece.

Fair Value is the Wrong Scapegoat

This piece was published this week by Bruegel in its Policy Contributions series. I detail the arguments in the current policy debate about fair value accounting and again conclude that the problem lies with prudential regulations, such as Basel II, rather than accounting standards.

Download BruegelPolicyContribution_May08.pdf to read the paper. A French version is forthcoming in June in a joint issue of the Revue d'Economie Financière and Risques.

Financing Europe's Fast Movers

Today, Bruegel published this new Policy Brief, which I co-authored with Thomas Philippon of NYU Stern School of Business. We argue that Europe's financial system, which now serves the needs of large established companies very well, could do a better job at providing adequate financing solutions for newer, emerging companies, especially those with a fast growth potential.

In the last section on policy recommendations, we outline the possible content of a public policy action plan. In our view, orienting Europe's financial system towards emerging-company growth could be a policy objective of the same level of priority as existing EU objectives of financial integration and financial stability.

Download BruegelPolicyBrief_310108.pdf if the above link is not functioning.

Another piece on the Audit Market

I realize I forgot to publish this in July: it is my second contribution to the UK Financial Reporting Council's project on Choice in the UK Audit Market.

Download FRC_Response_July07.pdf to read the piece, which was published by Bruegel in its Policy Contributions series. It refines the points of my 2006 contribution and focuses more clearly on the large audit networks' financial transparency.

Reporting for Business Segments

On Wednesday I was invited to give a testimony before the Committee of economic and monetary affairs of the European Parliament, on whether the EU should adopt the controversial IFRS 8 standard on how companies should report the performance of their individual business segments. This sounds like a arcane technical debate, but actually illustrates quite vividly the challenges of setting accounting standards based on investors' needs.

Download EuroParl_IFRS8_Sep07.pdf to read the points I developed in my testimony.

Is Europe Ready for a Big Banking Crisis?

On Friday, Bruegel published a new Policy Brief in which I argue that Europe's governments should contemplate a reform of their financial stability arrangements. Recent cross-border consolidation of Europe's banks and other financial developments make it increasingly doubtful that the current nationally-anchored framework could deal with the failure of a major financial institution with large operations in several EU countries. Introducing an EU tier of supervision focused on those 'pan-European banks' appears to me the only way to restore credible crisis management capability.

I also wrote an op-ed piece for the Financial Times, with summary of the argument. It was published on 7 September and you can read it here.

Download BruegelPolicyBrief_310807.pdf to read the piece - and please let me know your comments on this blog!

The Global Accounting Experiment

Bruegel just released my new study, The Global Accounting Experiment on the future of international accounting standard-setting, the second in its new Blueprint series.

In my opinion, accounting provides a unique case study of global economic governance in the making. This 'experiment' currently faces two significant challenges: the International Accounting Standards Board has not built enough legitimacy as a global policymaking entity, and there is a high risk that implementation within the European Union will not be consistent enough to fulfil the promise of financial statements' comparability.

The Global Accounting Experiment includes specific recommendations to the IASB, the EU, the US, the investment community and other participants so that this ambitious endeavour does not end in failure.

I also published a condensed version of the main arguments in the May issue of Financial World, the London-based industry monthly: Download FinancialWorld_May07.pdf.

Another related piece on IASB governance was published by Telos, a French-speaking discussion website.

Bruegel Policy Brief on Global Governance

Following the work several co-authors had done for the Finnish Presidency of the European Union in September, Bruegel just published a Policy Brief on 'Global Governance: An Agenda for Europe'. In it, we argue that US leadership in global governance can no longer be taken for granted, and that this creates new responsibilities for the EU. To rise to these responsibilities, the EU needs to get its act together and improve the efficiency and legitimacy of its own internal governance mechanisms.

Download BruegelPolicyBrief_181206.pdf in case the above link is not functioning.

The EU and the Governance of Globalisation

In this paper prepared by Bruegel for the Finnish Presidency of the European Union, Alan Ahearne, Jean Pisani-Ferry, André Sapir and I argue that the changing global circumstances call for a comprehensive rethink of the EU's positions, where the solidity of the post-war order guaranteed by US power can no longer be taken for granted.

Download GlobalEconomicGovernance_200906.pdf if the above link is not functioning.

Response to the UK Financial Reporting Council

In the spring of 2006, the Financial Reporting Council of the UK has opened a wide consultation on the audit services that focuses on choice and on the risks resulting from the limited number of international audit firms.

In my personal response to the FRC, which was published by Bruegel in its Policy Contribution series, I argue that the current structure of the audit market entails serious problems, and that two sharply different policy approaches, which I call "firm-count" and "open-access", can be envisaged to address them.

Download BruegelPolicyContribution_4.pdf if the above link is not functioning.

Farewell National Champions

On 3 July 2006 Bruegel published this Policy Brief in which I look at the internationalisation of Europe's largets companies and compare them to their US counterparts.

One finding of its study, which is based on publicly available information in annual reports and regulatory filings, is that Europe's large companies are escaping their national home base at a breathtaking pace - with some deep implications that many policymakers have not yet realised.

Download BruegelPolicyBrief_030706.pdf if the above link is not functioning.

In 2007 I wrote a French text (Download OpinionEuropeenne_2007.pdf) based on this Policy Brief for L'Opinion Européenne, a yearly publication edited by Dominique Reynié at Sciences Po in Paris.