Now We Are One...A Rough Start for the EEAS

The first year of the European External Action Service (EEAS) has already elicited much comment, both internally and externally. This contribution briefly reviews the nature of this commentary and then suggests some possible short-term ‘wins’ for the Service, as well as some challenges that will require a longer-term perspective. The main shorter-term issue considers the need to create stronger linkages and priorities between existing strategies and to start the difficult process of melding a common mindset within the Service. The longer-term challenges revolve around recruitment, balance and resources. The latter is particularly important in order to enable the delegations to assume their full roles. The barrage of criticism that greeted the EEAS’s first birthday is also a commentary on how critical the role of the Service is to achieving the core goals of the Lisbon Treaty in external relations; namely, to aim towards more coherence, effectiveness and visibility.

Time to Set Banking Regulation Right. CEPS Paperbacks. March 2012

Excessive leverage and risk-taking by large international banks were the main causes of the 2008-09 financial crisis and the ensuing sharp drop in economic activity and employment. World leaders and central bankers promised that it would not happen again and, to this end, undertook to overhaul banking regulation, first and foremost by rectifying Basel prudential rules. This study argues that the new Basel III Accord and the ensuing EU Capital Requirements Directive IV fail to correct the two main shortcomings of international prudential rules: 1) reliance on banks’ risk management models for the calculation of capital requirements and 2) the lack of accountability by supervisors. Accordingly, the authors propose the calculation of capital requirements without risk adjustment and creation of a system of mandated action by supervisors modelled on the US framework of Prompt Corrective Action (PCA). They also recommend that banks should be required to issue large amounts of debentures that are convertible into equity in order to strengthen market discipline on management and shareholders.