CONFRONTING THE CRISIS -- An EU financial doctrine and a new set of EU regulations for executive compensation in the banking and financial sector have emerged out of the financial chaos of the last week, French Finance Minister Christine Lagarde said in Washington on Friday. The new doctrine says EU governments will protect their financial institutions, safeguard the taxpayers' interests, put in motion a reform of the financial sector, guarantee bank deposits, and take a short term stake in financial institutions to help their recovery. The European Union's 27 member states will apply the financial doctrine according to their needs and the problems that they face, which sometimes vary dramatically. For example, Denmark, which has 114 different banks, must respond to very different circumstances than Sweden, which only has 14. The same applies to the new regulations on executive compensation adopted by the European finance ministers, said Lagarde who was speaking to members of the Washington think tank, the Council on Foreign Relations. At the top of the list is complete transparency of what she called "the whole package of personal goodies." In addition, compensation would be linked to performance, and would not be of a kind that encouraged speculation or "irresponsible behavior," she said. "We need to restore a sense of balance, and we need to get away from excess." Lagarde was introduced to the audience as a former member of the French national synchronized swimming team. This led her to comment that synchronization was a useful skill to have in the current crisis. "You also have to hold your breath," she added, "and for long periods of time."
Corridors of Power: The EU’s New Financial Doctrine, Training the Afghan Police, and More
