Friday, May 30, 2014

International Business News Update (USChamber of Commerce)

European Commission Consultation on Investor Protection
The European Commission has launched a public consultation on "investor protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP)" in an effort to make EU-US negotiations the most open trade talks to date.  The consultation will last 90 days, and consists of an online questionnaire covering 12 key issues of interest.  Those who wish to make their voice heard can find the questionnaire on the European Commission's website.  It is very important that the pro-open investment climate community weigh in with strong support for investor protections.

Updates to Investment Policy Central...

New Realities in the US-China Investment Relationship
The U.S. Chamber released a report on April 29th detailing a "major shift" in the flow of investment between the U.S. and China. According to the report, annual Chinese foreign direct investment (FDI) in the U.S. has surpassed the U.S FDI in China, and stresses the need for "timely Chinese investment liberalization" and support for an "open investment regime." Additionally, the report offers suggestions to U.S. and Chinese leadership on the most mutually beneficial way to handle the changed FDI flow relationship. The report is available under the China section o the Around the World page.
Multi- Association Letter Urges Senate Leaders to Support H.R. 2052
A coalition sent a letter to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell urging the Senate to support H.R. 2052, "Global Investment in American Jobs Act of 2013". The bill would help the United States increase its share in the global FDI and increase our economic strength and security long term. The letter is available under the U.S. section of the Around the World page.

BUSINESSEUROPE Releases New Position Paper on ISDS 
Earlier this month, BUSINESSEUROPE released a position paper explaining the role of investor-state dispute settlements (ISDS) and their necessity to investment protection in all European Union bilateral investmen treaties (BITs) and free trade agreements (FTAs). This paper also addresses the criticism and misconceptions against ISDS. The full paper is available under the Europe section of the Around the World page.

OFII Releases New Digital Magazine, Highlights the Benefits of Trade and Foreign Investment
Mary McLernon, President and CEO of the Office for International Investment (OFII), has recently announced the release of the OFII's new digital magazine American Manufacturig Quarterly (AMQ), which "highlights the importance of trade agreements in attracting foreign direct investment." The statement is available under the Inbound Investment section on the Benefits page.

Report: Redefining the American Auto Industry

The Association of Global Automakers in collaboration with the American International Automobile Dealers Association (AIADA) released a report at the AIADA's annual auto summit in Washington, DC titled Redefining the American Auto Industry. The report seeks convey to policymakers the expanding global face of the U.S. auto industry and how foreign and domestic auto companies are effecting the national and local markets. The report is available under the Inbound Investment section on the Benefits page.

BDI Releases New Repot on Investor- State Dispute Settlements (ISDS)

In April, BDI of Germany released a report entitled "Background: Facts and Figures- International Investment Agreements and Investor- State Dispute Settlement." The number of ISDS cases around the world has been on the rise, and critics are growing evermore vocal about their fears that ISDS gives investors power to challenge state laws. The full report is available under the Commentary section on the International Agreements page.

From the Blog...
In the news...

Foreign Direct Investment Up 8% in FY'14 at $24.3 Billion
Foreign direct investment into India grew by 8% year-on-year to USD 24.3 billion in 2013-14, according to the Department of Industrial Policy and Promotion (DIPP) data.
Read more.

AfDB Sees Foreign Direct Investments Into Africa Rising

The African Development Bank forecasts external financial inflows to rise to as much as 80 billion U.S. dollars this year amid increased tax revenues and regional integration to drive Africa's development and growth prospects. Foreign direct investments to Africa were 50 billion U.S. dollars and 56 billion U.S. dollars in 2012 and 2013 respectively, according to Africa's economic outlook 2014.The report released by the AfDB at the ongoing bank's meetings in Kigali indicates that foreign direct investments have fully recovered from the effects of the economic crisis. Read more.
China Eases Rules to Boost Foreign Direct Investment
China has relaxed some rules to make it easier for foreign companies to invest in China, including giving local authorities more power to approve deals, in the latest effort to cut red tape and quicken investment. The National Development and Reform Commission, the country's top economic planner, will delegate to local governments the power to approve foreign investment projects in categories it encourages that are worth less than $300 million. Read more.

How SMEs Can Benefit From Foreign Direct Investment
According to the OECD, the most attractive countries for foreign direct investors are those that have large reserves of material and raw material resources in addition to efficient and trained human capital, or that are linked to developed countries through trade agreements promoting investment. Read more.

Retailer Hope FDI in Multi-Brand Retail Doesn't Get Withdrawn by BJP Government in India!
BJP's election manifesto in India declared that Foreign Direct Investment (FDI) in multi-brand retail will be withdrawn. This has caused tension in the minds of foreign as well as domestic retailers who are hoping that the new Indian government will not do so. Read more.

Thursday, May 29, 2014

How to win "The War on Talents" (TechRepublic)

How tech companies keep using perks to win the 'war on talent'  By  May 23, 2014,

In the latest Glassdoor report, tech companies make up 12 of the top 25 companies for compensation and benefits. Here's why Silicon Valley has turned into the Big Rock Candy Mountain for tech jobs. 

We've heard the tales- there exist magical jobs out in Silicon Valley where your laundry is done for you, the food and drink flow freely, and office lunch rooms feature 19th century log cabins for inspiration.
And the pay is pretty good too.
According to a new report by Glassdoor, of the top 25 companies for compensation and benefits, 12 of them are tech companies. Topping off the list is Google at #1, Facebook at #3, and Adobe at #4.
"It's no surprise to see tech companies dominate this report," said Allyson Willoughby, Glassdoor senior vice president of people. "Tech companies have to hire for many hard-to-fill technical and engineering roles, and these employers offer competitive pay and benefits in order to win the fierce war on talent."
Trying to attract top talent is part of the reason why offering some less conventional workplace perks has gained popularity.
"Anecdotally, I've seen and heard about many interesting and unusual benefits and perks including companies that take all their employees on vacation for a week, on-site doctors, free Uber rides to and from work, and weekly beer carts that deliver beer to your desk," Willoughby said.
Glassdoor itself even offers a pet-friendly workplace, yoga classes, kayaks to take on the San Francisco Bay, and unlimited vacation time.
The trend toward this intense brand of benefits can be traced back to Google. According to Forbes, one of Google's first ideas, which came from Sergey Brin, was to provide nannies for the children of parents on the less-than-100-person staff.
Google's most recent addition to its benefit plans was "death benefits" in 2012. The company announced it would pay the families of deceased employees 50% of the salary for 10 years- and with no requirement for time worked at Google.
Aside from trying to nab the best tech talent available, Forbes writer John Goodman described the unconventional benefits trend as being an alternative to paying higher wages. He also mentioned California's taxes:
"Even moderate income families in California can face marginal tax rates that approach 50%. When an employer tries to pay a worker one more dollar, the employee takes home slightly more than 50 cents. Most employee benefits, however, are tax free. That means that the benefit could be worth half its cost and still be a good deal for the employees."
Willoughby said that while perks can help sway a candidate's decision initially, they don't guarantee an employee will stick around. Job seekers tend to make compensation their first priority. After that, Willoughby said, one in five considers perks an important benefit. Ultimately, the free food might not be enough.
"We find that workplace factors like career growth opportunities and the company's culture and values are much more valuable to job seekers than perks and tend to have more influence over their career decisions," she said.
Salesforce, which is #9 on Glassdoor's list, has its own ideas.
"It's a competitive market so we need to ensure we have the world's best talent, but you don't get that through perk wars," said Monika Fahlbusch, senior vice president of global employee success at Salesforce. "In other words, it's not the ping pong table or the corn hole that attracts the best talent, but a collaborative work environment that provides a way for our team sport culture to thrive."
For companies looking to snag the best talent, Willoughby said it's important to remember that perks, benefits, and pay are not a one-size-fits-all model.
"Each company should carefully assess what is right for it, and what isn't to offer employees," she said. "Not every company has the ability to offer the same types of perks as a Silicon Valley tech company, but smaller companies can be competitive in terms of pay or other benefits they can offer."
Erin Carson is a Staff Writer for TechRepublic. She covers the impact of social media in business and the ways technology is transforming the future of work.

Wednesday, May 28, 2014

Rebooting Windows for a new era of computing (ZDNet)

Summary: The next couple of years will be crucial for Microsoft, but I believe that the company has what it takes to surprise us, and that it still has a good chance of transforming itself into a company that can rise to the challenges and changes thrown up by the post PC era.

Microsoft is undergoing a critical transition. The rapidly changing tech landscape is forcing its evolution from a company focused on the PC to a company that has to look to a future where post PC devices dominate.
No matter how you try to package that change, it represents a shift of tectonic proportions.
Contrary to what many people think, Microsoft has had its eye on a post PC future for over a decade. Back in November 2002 Microsoft released a Tablet PC Edition of Windows XP in an attempt to foster and support an embryonic PC tablet ecosystem and kick-start a new computing revolution. But the world wasn't ready for tablets back then, with consumers seeing them as too expensive and too clumsy.
Despite numerous attempts by Microsoft, this is a situation that wouldn't change until Apple released the iPad at the beginning of 2010.  
But nowadays tablets have become established in the mainstream culture as credible consumer and enterprise devices.
Microsoft is once again making a tablet push, but this time rather than trying to be the catalyst, it is instead attempting to gain a toehold in a space that has already exploded into maturity. Trying to do this has turned Windows on its head and transformed it into a touch-first platform (much to the annoyance of many Windows users still using the platform on non-touch devices such as desktops and notebooks), while on the hardware front it is aggressively pushing its new Surface tablets as notebook replacements.
The Redmond, Wash.-based devices and services giant also continues to plug away at the smartphone market following the takeover of Nokia, but in more than four years the market share ofWindows Phone seems stubbornly stuck at 3 percent.
Microsoft's vision of computing is that everything is potentially a PC; all it needs to do is run Windows and Office. This has been Microsoft's strategy with the PC for decades, and it is the approach it took with smartphones (where the OS is called Windows Phone), and it is now Microsoft's tactic with tablets (where it wants the Surface to be a notebook replacement).
Everything comes back to Windows and Office, because these are brands that bring in the dollars.
"Despite dominating the PC market, Microsoft is finding it hard to take this advantage and translate it into success in these new markets."
Is it a winning formula? Well, the tech landscape as it currently stands would suggest it isn't. The PC sector has stalled, and according to OEM insiders Windows 8 has only made this problem worse. Meanwhile on the post-PC front, iPads, iPhones and a whole raft of Android devices are inundating the market, while Microsoft is scrabbling to make real headway.
Despite dominating the PC market, Microsoft is finding it hard to take this advantage and translate it into success in these new markets.
But that's the past. What about the future? Can Microsoft reboot (or at the very least reshape) Windows into a platform – or at least a brand – that can work in a post PC world?
I think it can.
First of all, let's start with Windows. There's no doubt that Windows 8 got off to a rocky start, but with Windows 8.1 Microsoft smoothed off a lot of the rough corners and the platform got a lot better for people using it on non-touch devices – in other words, the majority of Windows users. Unfortunately, the problem is that the reputation of Windows 8 is tarnished, and just as with Windows Vista, no amount of tweaking or updating can seem to get rid of that. This is a shame, but this seems to be how it works with operating systems, and Windows in particular. How it is received early on tends to stick for the lifespan of the platform. Windows XP and Windows 7 were both well loved, while Windows Vista and Windows 8 were veiled by a bad vibe that no amount of betterment in the form of service packs and updates could eradicate.
Fortunately for Microsoft, salvation is coming in the form of Windows 9. The follow-on to Windows 8 is now just around the corner, and my guess is that this will build on what Microsoft has learned that people want from the Windows platform in this post PC era, and that this will help it deliver a platform that can accommodate being driven both by the traditional keyboard and mouse, and touch. I can make this guess confidently because Microsoft suffered a serious stumble with Windows 8, and given the precarious position that the PC industry is in, it can't afford to gamble like it did with Windows 8.
Microsoft has to make Windows 9 what the users want, not what will further its post PC plans.
The desktop continues to be the dominant Windows platform, and there's no point in CEO Nadella or anyone else at Microsoft hoping or wishing otherwise. That's the position that Microsoft finds itself in, and acknowledging that gives it the best chance of success. Microsoft has suffered too many stumbles and setbacks lately, and many of these have been a result of trying to tell consumers what they want, rather than listening to them and giving them what they need.
I believe that Windows 9 will be closer in look and feel to Windows 7 than it will be to Windows 8, and that touch will coexist better with traditional input devices. Until touch is ubiquitous on the PC – and I don't see the desktop and notebook form factors ever being ideally suite to touch – then Windows has to put the keyboard, mouse, and trackpad first.
So where does the new Surface Pro 3 tablet fit into the equation?
My take on this is that Surface has less to do with selling tens of millions of tablets and more to do with priming the Windows tablet pump. From a hardware perspective the Surface Pro 3 is a nice bit of kit, but the price, especially at the upper end, is painfully high. While there will no doubt be interest in the Surface Pro 3, the real benefit to Microsoft will come where hardware OEMs make their own next-generation tablets, which will undoubtedly be cheaper and offer better value for the consumer.
Personally, I like the Surface Pro 3, and I could see myself getting a lot of work done with the Core i7, 512 GB model, but the idea of throwing $2,000 at a tablet, especially when the Surface Pro 2 was only out for eight months before being replaced, leaves me cold. At the very least I'd want a guarantee from Microsoft that this tablet will run Windows 9, and giving me that update free of charge would also help soften the blow of the initial cost. But I also know that, thanks to Microsoft and the Surface, by the time Windows 9 comes along there will be better and cheaper tablets on the market.
Will tablets ever replace desktops and notebooks? Perhaps one day they will, but we're a long way off from that day. Software makers across the whole industry need to figure out how to add touch to existing applications while still allowing them to work with the keyboard and mouse. This is quite a challenge, and one that not even Microsoft has managed to address with its software.
Microsoft still has a lot to do when it comes to mobile.
Not only is market share poor, but the developer ecosystem is too weak to draw new users to the platform. Apps are the cornerstone of all mobile platforms, and with Android and iOS being as dominant as they are, developers are reluctant to put in the effort on a new platform when there's so much lower hanging fruit to target. Both iOS and Android has the quality and quantity of apps to keep users interested, but despite years of trying, Microsoft has failed to achieve either of these. By seeming to ditch Windows RT, Microsoft has consolidated the Windows brand to two areas – PC and mobile – and this helps to keep developers more focused.
The next couple of years will be crucial for Microsoft, but I believe that the company has what it takes to surprise us, and that it still has a good chance of transforming itself into a company that can rise to the challenges and changes thrown up by the post-PC era. And one of the biggest challenges it has to address is how to make one brand work across all screens.
Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

Friday, May 23, 2014

California OKs Self-Driving Car Rules (PCMagazine)

Google Driverless (Self-Driving) Car
The California Department of Motor Vehicles this week approved new rules that govern autonomous vehicle testing in the state.
Come Sept. 16, local residents may see more self-driving cars on California roadways, but don't expect to spot cars rocketing down the highway with an empty driver's seat just yet. For now, any company testing an autonomous vehicle must have a trained driver behind the wheel, ready to take over in the event of a malfunction, and at least $5 million worth of liability insurance.
The rules—and there are many of them—are almost textbook-like in their rigidity, but do a fair job of covering all aspects of state and test driver responsibilities.
An operator must be in the driver's seat, monitoring the vehicle's operations "and able to take over physical control of the vehicle." So, no napping, reading the paper, or FaceTiming.
Additional requirements include extensive identification of the autonomous vehicle, as well as proof that the "driver" is on the company's payroll and has met all state-required qualifications—including passing the training program.
And, just like earning a traditional driver's license, all self-driving cars must first be tested in a controlled environment before hitting the open road.
The California DMV will start accepting applications for the program on July 1. A $150 annual processing fee covers up to 10 self-driving cars and 20 test drivers. Additional cars or warm bodies are $50.
This week's announcement has been in the works since December, when the DMV first circulated regulations for public use of autonomous vehicles. It held a public hearing in January, and on Monday approved the rules.
The rules only cover manufacturer testing of self-driving cars. Rules regarding public use of autonomous vehicles are still in development at the DMV and are expected to be adopted by Jan. 1, 2015.
Mountain View-based Google has been one of the most prominent supporters of self-driving car tech. Recently, the search giant said it had logged almost 700,000 autonomous miles.
Google was a big supporter of California legislation passed in 2012 that allows the technology. With Google execs present, Gov. Jerry Brown signed into law a bill that established safety and performance standards for self-driving cars in the state;Nevada also passed similar legislation.

Thursday, May 22, 2014

Información de Cuentas Nacionales de Uruguay

La Cámara Nacional de Comercio y Servicios del Uruguay nos hace llegar la publicación sobre las Cuentas Nacionales del país, hecha por ese Depto. de la Cámara. A continuación una síntesis de lo más importante:

Wednesday, May 21, 2014

Why YouTube Wants to Buy Twitch (PCMagazine)

The ESPN of streaming video game content is a succulent morsel that YouTube wants to claim for its own. Here's why.
Unconfirmed reports surfaced this weekend that video giant YouTube is in talks to buy Twitch, the ESPN of video game content, for more than $1 billion.
That's no small sum. On the surface, YouTube's potential Twitch purchase may leave many scratching their heads, but it represents not only an expanded video footprint, but a way to tap the money-spending, 18-to 34-year-old gaming video game-playing demographic.
Twitch Defined
Twitch is the destination of choice for streaming video game content. Twitch content include trailers, personality-driven shows, Let's Plays (video walkthroughs often containing commentary), and competitive versus play in popular eSports games like StarCraft II and Ultimate Marvel vs Capcom 3. Twitch can be viewed using a Web browser, or apps on the Android, iOS, PlayStation 4, and Xbox One platforms. Twitch is everywhere and highly accessible.

Visitors can watch live video game streams from both professionals and amateurs dig into archived footage, and chat with others. Twitch draws 45 million unique visitors per month who view an astonishing 8.5 billion minutes of video per month.
Big Money Potential
YouTube executives surely salivate over those numbers as the company could extend Google's AdSense advertising platform to help companies market everything from video games to soft drinks. In fact, Twitch already has its own advertising structure in place that enables hosts to generate income by broadcasting video games or gaming-related shows. As a result, the community wouldn't find it unusual should ads appear in Twitch videos.

Currently, gamers who wish to ditch display and video ads subscribe to Twitch's $8.99 per month Turbo premium service. Should this remain in place post-purchase, YouTube would have a seconday Twitch revenue stream, especially if the company adds more features to make upgrading an even more attractive option.
Potential Blowback
However, that doesn't mean that the Twitch community should be excited about this possible aquisition. On the contrary, they should probably be leery if they were to use YouTube as an example of what may be in store for Twitch.

Many YouTubers became enraged when Google forced them to use the company's then-new social network, Google+, to leave comments. Even worse, many YouTube videos featuring video game playthroughs were flagged as copyright-violating material and blocked in late 2013. Select publishers rallied to have the videos reinstated and YouTube went on to fix its ID system that caused the content blocks. Although those auto-removals appear to be a thing of the past, gamers who invest in live streams haven't forgotten the incident.
A Power Move
Still, the purchase hasn't been confirmed by either company, so this is, admittedly, all speculation. Even if the rumored deal is met with consumer outrage, YouTube's potential play is still quite strong because there isn't a viable alternative streaming video game the moment. Twitch is deeply embedded in gamer culture and it may take a ball drop of massive proportions to truly sever the ties. In terms of business, this is a smart move for YouTube.

Keep your eyes on for the latest YouTube and Twitch news. For more information on Twitch, check out our Twitch desktopAndroid, and Twitch reviews.

Tuesday, May 20, 2014

Chinese 'military hackers' charged with cyber espionage against US companies (ZDNet)

Summary: First-of-its-kind case alleges US companies were targeted by Chinese "state actors".
By  |              
The US has charged five men who it described as "military hackers" with hacking into US corporations to steal secrets that could be useful to Chinese companies, in the first case of its kind.
A grand jury in the Western District of Pennsylvania indicted the five men for computer hacking, economic espionage and other offences directed at six US organisations in the nuclear power, metals and solar products industries.
The indictment alleges that the defendants conspired to hack into US organisations to steal information that would be useful to their competitors in China, including state-owned enterprises. 
"This is a case alleging economic espionage by members of the Chinese military and represents the first ever charges against a state actor for this type of hacking," US Attorney  General Eric Holder said. 
"The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. Success in the global market place should be based solely on a company's ability to innovate and compete, not on a sponsor government's ability to spy and steal business secrets."
The US Justice Department said the five men were officers in Unit 61398 of the Third Department of the Chinese People's Liberation Army.
The US Justice department said the hacking took place between 2006 and this year and organisations targeted included Westinghouse Electric Co, US subsidiaries of SolarWorld, US Steel, Allegheny Technologies Incorporated (ATI), the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and Alcoa Inc.
FBI director James B. Comey said: "For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries."
The Department of Justice noted that an indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law. The Chinese embassy in Washington could not immediately be reached for comment.
Topic: Security


Steve Ranger is the UK editor-in-chief of ZDNet and TechRepublic, and has been writing about technology, business and culture for more than a decade. Previously he was the editor of

Monday, May 19, 2014

Euro Illusions Force Weaker Nations Into High Unemployment (BusinessWeek)

Europe’s economic prospects are picking up, according to the European Commission. Growth is slowly gaining momentum, say the forecasters in Brussels, and “the conditions for sustained recovery in the medium term are also improving.” In a Bloomberg Markets poll, 83 percent of investors say they believe the euro area’s economies are either stable or getting stronger. The crisis appears to be over. Supposing that’s all true, is it really good news?
The answer isn’t obvious. Granted, sluggish growth is better than no growth. Output this year is expected to be just 1.2 percent higher than in 2013, but after a prolonged contraction, any recovery is welcome. It’s encouraging, too, that the EU has avoided the most frightening meltdown scenarios. In 2011, when the crisis was at its worst, many dreaded an outright collapse of the euro currency system. That would have been a calamity, causing an even worse recession. Thank heaven it didn’t happen.
Illustration by 731
On the other hand, it would at least have been a clarifying calamity—the action-forcing event the EU still so badly needs. The risk today is that Europe’s weak, faltering recovery will be seen as good enough, making the changes that could restore Europe’s vitality much less likely to happen. Muddling through, ever the EU’s default mode, may be the worst possible outcome. Europe might find, to its ultimate cost, that the contradiction built into its economic system is tolerable after all. The price may not be another sudden breakdown—though this remains a possibility—but persistently high unemployment in many countries and chronic underperformance across the EU as a whole.
The basic contradiction was foreseen many years ago. In a single-currency system, policymakers lack the most powerful tool for helping individual economies adjust to setbacks: interest rates set according to national conditions. To succeed, a single-currency system needs either large fiscal transfers (so fiscal policy can do what monetary policy can’t) or highly integrated labor markets (so the unemployed can move to stronger markets to find work), and preferably both. The euro area has neither, and its governments, even after an epic sovereign debt crisis, have no plans to do much about it. This leaves the EU’s weakest economies with no choice but to restore their prospects through the brutality of “internal devaluation”—using high unemployment to force down labor costs.
The countries at the center of the crisis—Greece, Ireland, Portugal, and Spain—have all made heroic efforts to improve their competitiveness in the past four years, but they have more work to do. Meanwhile, their unemployment rates are 26 percent, 11 percent, 15 percent, and 26 percent, respectively. The commission expects little improvement in 2015. Two of the euro zone’s biggest economies, France and Italy, are in deep trouble as well, with unemployment above 10 percent and growth in 2014 expected to be 1 percent or less.
That would be bad enough by itself, but there’s a further danger. The Bloomberg Markets poll that found investors growing more optimistic about the EU’s prospects also reported mounting concern about the risk of deflation. Investors are right to be concerned. Inflation in the euro area stands at 0.7 percent, far below the European Central Bank’s target of “less than but close to 2 percent.” Next year the commission expects it to be 1.2 percent. Very low inflation maintains tight financial conditions by keeping real (inflation-adjusted) interest rates higher than they otherwise would be. Outright deflation would worsen that problem and further compound it by adding to the real burden of debt. The result would be prolonged economic stagnation and greater financial fragility.
It’s telling that in late January when the ECB announced it was conducting new stress tests of the EU’s banks—asking whether their capital was adequate to absorb losses if things should again turn out badly—deflation was not a risk the banks were told to consider. As a result, though better than the previous such exercise, the new stress tests are far from reassuring. Europe’s banking system remains vulnerable to crisis, and its regulatory reforms to date have been woefully lacking.
Governments have acknowledged the need to create a banking union capable of defending the financial system against a new collapse of confidence. That’s a step in the right direction, but there’s still no common fund for deposit insurance, for instance. The system for resolving failed banks is also seriously underpowered. A mere €55 billion ($75.4 billion) will eventually be allocated for the purpose—1 percent of the bank deposits in question, far too little to cope with a crisis.