Donald Trump, who has been in power for several weeks, is well on his way to pursuing deregulation of the financial sector. With the European banking sector already losing ground to US banks, the gap is likely to widen as the EU implements Basel 4 standards in 2025. These standards were published by the Basel Committee in December 2017 and transposed at European level through the Capital Requirement Regulations 3 (CRR3) and the Capital Requirements Directive 6 (CRD6). CRR3 poses serious constraints for European banks by increasing capital requirements and risk-weighted assets. Through this standard, the Basel Committee also aims for international harmonization among banks. European banks, which are fond of internal models that consume less equity, will replace them with standard models used by their American counterparts. Among the constraints of the new credit risk regulation is the notion of “Output Floor”. This aims to reduce excessive variability in institutions’ own funds requirements calculated using internal models. It should improve the comparability of institutions’ capital ratios, restore the credibility of internal models and ensure a level playing field between institutions. In practice, the weighted assets calculated by banks on the basis of their internal models may not, in total, be less than 72,5% of the weighted assets calculated using standard approaches. Thus, the benefit a bank can derive from using its own models is limited to 27.5% of the weighted assets calculated using standard approaches. The Directive will be implemented on a transitional basis until 2030 to avoid sudden increases in capital requirements associated with certain asset classes. Another novelty in CRR3 is the consideration of the crypto-asset market. The European Union had already taken the matter into its own hands with the introduction of a uniform legal framework in the form of the MiCA (Markets in Crypto-Assets) regulation adopted in May 2023. After several years of rapid growth in crypto-asset markets driven by a growing number of investors, CRR3 has decided to integrate crypto-assets into the banking prudential framework. Since Donald Trump’s election, the price of bitcoin has soared. The 47th president of the United States recently indicated his intention to establish a strategic Federal Reserve of Bitcoin. He sees it as a way to strengthen the U.S. economy in the face of growing competition from China. Financial institutions are thus exposed to increasing risks that can affect financial stability: mainly credit risk, but also counterparty, market and liquidity risk. The standards therefore aim to regulate and limit the risks associated with these exposures. The European Union, as always in good shape, is therefore continuing to implement the banking package. CRR3 has even planned an assessment of the overall situation of the banking system in the EU by 31/12/2028. Meanwhile, our neighbors are charting their way down less regulated paths…In the UK, the entire Basel III reform has been postponed until 2026. In the United States, plans were put on hold following the resignation in early January of Michael Barr, Vice Chairman of the US Federal Reserve Board responsible for banking supervision. Donald Trump now has a free hand to choose a successor closer to his ideas. Column by Sophie Friot
PARRIQUE T, Ralentir ou périr, Eds Seuil, 311 pages.
The book’s subtitle is: the economics of degrowth. This sets the tone for the entire book. For the author, economic growth only benefits the richest: one only has to look at the persistence of the number of poor people. Inequalities are creating significant gaps for the poorest. Moreover, the wealthy are the source of the most pollution. A sentence from the author sums up his point: “degrowth, as a reduction in production and consumption to alleviate the ecological footprint, planned democratically in a spirit of social justice and in the interest of well-being” Is GDP the only important thing? It is neither more nor less than an “economic agitation” that does not take into account other factors such as human well-being or happiness. Well-being is not necessarily linked to changes in GDP. We must escape this “tyranny” of GDP. Currently, the race to improve labor productivity in order to increase growth is a goal that we must constantly try to achieve, at the expense of the environmental damage to ecosystems. Does economic growth reduce inequality? This is not accurate. It all depends on the distribution of this growth between wages and capital income. What do the proponents of degrowth propose? A shift towards sustainable degrowth, which would lead to a harmonious society. It means slowing down economic flows and turning to more sober and frugal lifestyles. The state should be the driver of this process, together with the representatives of the people. The goal would be to respect social justice by providing well-being, while respecting the balance of ecosystems. Any productivity gains would be oriented towards the well-being of workers: for example, by reducing working time. Suffice to say, this theory of degrowth generates a lot of criticism about its realism and how to achieve it. Indeed, what would happen to a country that adopted this new way of life, in a globalized environment? Wouldn’t it risk being marginalized, with disastrous consequences for its economic situation: capital flight and economic balances disrupted? It is up to each individual to form their own opinion after reading this well-documented and clear book. Timothée Parrique is a researcher in ecological economics at Lund University in Sweden. review by Renzo Borsato
FARAH Frédéric, No Frexit, What young people think of Europe. Eds Fayard, 154 pages.
The author approaches the European subject by probing the opinions of his high school and college students. The surveyed students were from Seine-Saint-Denis, the 5th arrondissement of Paris, and Tolbiac. Are young people passionate about the European project? Do they feel more European than French? Do they know the European institutions? Bagnolet high school students They are mostly from immigrant backgrounds and live in difficult family circumstances (some parents are unemployed). They note that Europe may be a market offering opportunities. Given its presence in the media world, the ECB is perceived as a monetary regulation institution. However, the other European institutions are less well known: the Parliament, the Commission, the Council. The Schengen area is highlighted for the convenience of traveling in Europe. It should be noted that all they have known is the euro, which facilitates trade. The Erasmus program makes them aware of their belonging to Europe. Preparatory students (Paris 5th and 16th arrondissement) Although they are of different sociological origins (more affluent social background), they adhere to the idea of a Europe that facilitates trade between its members. Tolbiac students Their approach is a little different: they know better the various workings of the institution. Like their prep colleagues, they recognize the importance of the role played by the European Central Bank (ECB). They also note the importance of collective action during the financial crises and the COVID-19 pandemic. In conclusion, no group of students mentioned the idea of a “Frexit”. It should first be noted that students see the practical side of Europe because of the existence of the Erasmus program: it is a way to open up to other horizons and other cultures. It was created in 1987. These young people were born after the creation of Europe and the euro: it would not occur to them to question it. Even the far-right political parties have abandoned this idea, which they had fiercely defended a few years earlier. One particular point brings negative remarks: the social aspect. Indeed, because of the commercial competition between members, employees earning minimum wage may find themselves unemployed. Some industries are relocated to countries with lower wages. This book brings us closer to the concerns of these young people: we must listen to them and enlighten them on the path of Europe: they are the ones who will be the actors of the next European advances. Frédéric FARAH is a professor of economic and social sciences, a teacher in preparatory classes and at the University of Paris 1 Panthéon Sorbonne. Chronicle by Renzo Borsato.
QUAND LA MACHINE APPREND, Editions Odile Jacob, 2021, 394 pages
This atypical book presents three levels of reading. The life story of a young French engineer with a passion for algorithms who will meet other enthusiasts, go into exile in the United States, work in the largest American laboratories, teach at the University of New York, win the Turing Prize, be considered the father of neural networks or “deep learning” and finally lead the fundamental research of Facebook. But mathematicians and computer scientists will also be able to discover or deepen, through examples of codes and equations, the functioning of these machines which can acquire by themselves the experience and the capacities to accomplish tasks which are assigned to them. Finally, AI users will be interested in its latest developments, but also in its excesses (especially Cambridge Analytica) or its algorithmic biases. Yann Le Cun delivers his vision on the economic, social, societal and ethical impacts of AI, as well as on the future progress of this still young science whose powers of transformation of our society are considerable. Philippe Alezard’s note
The AI Summit, and then what?
Between innovation and regulation, what choices for Europe? Conferences-debates organized by the Debouzy firm, February 12, 2025. In the aftermath of the “AI Action” summit organized in Paris and the “open house” day at Station F, as well as the publication of the Draghi and Letta reports and the European Commission’s “Competitiveness Compass” plan, but above all, the election of Donald Trump and the ongoing geopolitical and technological upheavals, what will be Europe’s place in the new balance of power? Can it impose its rules as a global reference? Does the regulation advocated during the European Commission’s previous mandate – particularly in terms of personal data protection (GDPR) – have any chance of being implemented in AI? Marc Mossé (environmental advisor at Debouzy) recalled the challenges of the Paris summit, which brought together heads of state and leaders of major tech companies. He noted that for the past 15 years, AI has no longer been a matter of regulating a “common good”, but has become a “lever of power” for a State in the confrontation between geopolitical blocs. He noted that since the emergence of generative AI in 2022, the financial stakes have increased tenfold, with the US raising more than $500 billion, the European Union more than €200 billion and France €109 billion (apparently not included in the European envelope), to finance the development of AI. Pierre Sellal (French Ambassador) stated that the Paris Summit had made it possible to better measure the impacts of AI in certain sectors such as defense, health or energy, but that paradoxically, the effects of AI on employment and education, as well as the ethical questions posed by certain applications of AI, had not been sufficiently debated. He noted that major differences had emerged between the American and European approaches to AI regulation. Two major countries – the United States and the United Kingdom – refused to sign the final declaration of the summit. Florence G. Sell (professor at Stanford) observed a widening of the cultural divide between American and European (especially French) jurists, the former being in favor of a soft law based on AI “governance” and a flexible framework of the AI value chain, and the latter being more attached to a hard law based on ethical principles and regulation of practices. The former are opposed to the “bureaucratization of AI development” (the “Brussels effect”) and the latter are hostile to libertarian practices of crony capitalism in the name of freedom of creation. GAFAM, however, is rather opposed to open source applications, preferring an open source way, which reveals the logic of data processing, but not the source codes themselves and the training databases considered as business secrets. The recent open-source release of the Chinese DeepSeek solution has sparked reactions in the AI ecosystem, with several experts believing that the software was trained on data from the results of GPT chat processing (“distillation”) and that this collective practice could in the future reduce the costs of storing and processing current databases. Mahasti Razavi (partner at Debouzy) assures that the European Union – and France in particular – has many assets in the face of American and Chinese competitors. It has an elite group of AI engineers and several large data storage centers. As of 2024, more than 800 start-ups have been created in France. However, the European market for users of AI solutions remains too small and fragmented compared to the US and Chinese markets. Mahasti Razavi advocates the long-term establishment of a “security framework” based on trust between the multiple stakeholders of AI (combining experts, practitioners, politicians, lawyers and academics) and based on practicable rules of “good governance” applied to a “more frugal AI” than the current general AI. She recognizes that the current AI Act needs to be simplified. The debates that followed the conferences focused in particular on the positive impacts (AI solutions can generate competitive advantages for companies) and negative impacts (AI destroys certain jobs and involves unprecedented retraining efforts, mainly in the service trades). In particular, efforts will have to be made in terms of teaching and learning new professions. Notes by J-J. Pluchart
Gauthier DOMBREVILLE, VarIAtions. IA : le puzzle de notre futur s’assemble, Eds L’Harmattan, 297 pages.
Since the launch in 2022 by Open AI of the first Chat GPT application, the development of generative AI (IAg) has been one of the main issues of concern for academic researchers and experienced AI practitioners, as well as for authors of science fiction novels. Most publications focus on its functional aspects and socio-economic impacts, but some of them reflect the diversity and acuity of the questions and concerns raised by the meteoric rise of AI, blockchain and Large Language Models (LLM). They engage in various approaches to these developments (descriptions, practical examples, case studies, etc.), but few of them, like Philip K. Dick or Isaac Asimov, practice the art of the novel or short story. This is the case of Gauthier Dombreville’s book, which deserves special attention for its originality and creativity. It is organized into nine short stories featuring imaginary situations that could be triggered by future developments in AI, autonomous driving, managed traffic, instant exchanges, voice assistants, digital twins, image generators, etc. The author recalls the projects imagined and implemented by the leaders of GAFAM – and in particular the “prophecies” of Mark Zuckerberg, founder of Meta. He then presents these situations in the manner of science fiction novels. He uses concrete examples to show the dangers of “crazy digital innovations”, the loss of control of black boxes, overly intelligent assistant robots, new humanoids, etc. Although presented as a “vacation read”, the book encourages reflection on the distressing and dehumanizing characteristics of the new “artificial paradises” engendered by IAg solutions. Reading allows us to glimpse some unsuspected externalities of business management. The author is an engineer with a passion for science fiction. Review written by J-J. PLUCHART
Olivier LASCAR, DEEP FAKE. L’IA au service du faux, Eds Eyrolles, 2025, 195 pages.
The book is doubly original in its subject matter – “hyper fakes” or deepfakes made possible by AI – and in its style, which is both precise and spontaneous. It presents the evolution of counterfeits, fakes, simulations, manipulations… throughout the ages. It shows that AI – especially in its generative version that appeared in 2022 with the ChatGPT solution – has accelerated the movement of disinformation, some of whose objectives, contrary to the ethics of AI, aim to hide the truth (“post-truth”), to disguise reality (“hyper-reality”), to simulate an object or influence a subject (nudging). This propensity of AI to “falsify reality” has been multiplied by increasingly massive data processing, mainly from exchanges on social networks. It is also due to the interoperability of communication vectors (voice, images, videos,texts), but also to the development of software between geopolitical blocks, nation-states, political currents, social groups, etc. The author provides a wealth of examples, some well-known, some less so, of fake news, cheap fakes and deep fakes, with tragicomic or dramatic consequences, but he is above all engaged in a philosophical (or rather philological) reflection on the representations of reality due to Plato (the “myth of the cave”), to Kant (the “phenomena”), to Baudrillard (the “simulations and simulacra”), to Debord (the “society of the spectacle”), to Benjamin (the “loss of authenticity”), to Rivault d’Allone (the “weakness of the true”) and to Guerouanou (his doctoral thesis on the “vertigo of anthropotechnics”). Olivier Laskar analyzes the ongoing research on falsification and simulation techniques, but also on the detection of fakes and plagiarism (debunking) and the tracing of fakes (water making). In particular, he presents the French project Moshi, which foreshadows the conversational robots of tomorrow, whose image and voice simulate “almost to perfection” the exchanges and emotions of subjects in a given situation. This new “fake technology” is developed by the offer of easily accessible open source software, emanating from start-ups and academic research laboratories. These developments fuel the practices of nudging (influence), green washing (greening of projects), social bashing (denigration)…, but they also raise new, more philosophical questions about the notions of truth and reality, normal and paranormal. Olivier Laskar (engineer) is editor-in-chief of the digital division of the journal Sciences et Avenir. note by J-J.Pluchart
Philippe AGHION, Anne BOUVEROT, I.A. Notre ambition pour la France, Eds Odile Jacob, 275 pages.
This book presents the official report of the Study Commission on Artificial Intelligence created by the government of Elisabeth Borne in September 2023. The Commission was tasked with presenting “operational, realistic and ambitious proposals supported by a long-term, comprehensive and objective vision”. AI is ubiquitous in public debate, although it is not new. Alan Turing, the British mathematician and cryptologist considered to be its founder, was already interested in the ability of a machine to imitate a conversation in 1950. However, the generative AI that emerged in 2022 represents a decisive turning point in this new technology. Through a written or oral dialogue interface with humans, the machine generates content in the form of text, images, sound, video or code, opening up a field of automatable possibilities. This technological revolution, with its considerable potential for progress, affects all areas of activity and all social groups. Although Europe – and France in particular – have real assets in terms of AI, they seem to be victims of a feeling of helplessness and technological downgrading, unlike China and the United States, which have made AI the pillar of their power strategy and the engine of their development. The “Aghion – Bouverot Commission” has identified, detailed and quantified 25 recommendations grouped into six main lines of structuring actions, considered essential if Europe and France want to lead a policy of deployment and control of the potential of AI; immediately launch an awareness and training plan; redirect savings towards innovation and create a “France & AI” fund; make France a major center of computing power; facilitate access to personal data while respecting intellectual property, assume the principle of an AI exception in public research and finally promote global governance of AI. The proposed plan corresponds to an annual commitment of around 5 billion euros for the next five years, of which 45% will be mobilized in technological and industrial investment and 35% in the dissemination of AI in the economy. This represents an increase of about 0.3% in public spending, knowing that the cost of inaction would be much higher and would put France at risk of historic downgrading. Philippe Aghion is a professor at the Collège de France, INSEAD and the London School of Economics. Anne Bouverot chairs the board of directors of the ENS and co-founded Abeona, which works for the development of responsible AI. Chronicle by Ph ALEZARD
THE NEW DOCTRINES OF CENTRAL BANKS
Benoît Coeuré and Hans-Helmut Kotz (eds) Revue d’économie financière-REF (Financial Economics Review) No. 144, 2022 The latest issue of the REF answers the main questions raised by the current revision of the European Central Bank’s monetary policy. It brings together the governors of several central banks and recognized monetary experts. It combines both theoretical and practical approaches to the issues raised by the revision of the ECB’s strategy. It is currently the best French-language source for reflection on the contemporary monetary economy. In the introduction, Benoît Coeuré and Hans-Helmut Kotz draw lessons from the financial crises that have occurred since 2008. They note that central banks have been able to adapt their strategies to changes in their economic and financial environments through the coordinated use of conventional and unconventional instruments. Central banks have been true to their mandates, focusing on the fight against inflation and supporting economic growth through an “inexorable decline in interest rates.” They note that the current economic situation requires the implementation of a new monetary policy. How can we redirect savings towards consumption and investment, initiate disinflation, combine the monetary and fiscal policies of States, support energy and climate transitions, and regulate crypto-assets? In the first part, the authors compare the monetary doctrines applied by the ECB (P-R. Lane) and the FED (R-H Clarida) respectively. They question the effectiveness of unconventional measures (low interest rates, forward guidance, purchase of public debt, liquidity support) and explore the possible new approaches of central banks in a more demanding economic environment, marked by a “double shock” of supply and demand (F. Villeroy de Galhau, V. Brignon, and B. Cabrillac). They analyze the changes in strategies (O. Issing) and the possible exceptional measures in order to practice a “flexible targeting of inflation” (O. Schumacher). In the second part, the experts discuss the ways of “budgeting monetary policies”, recalling that central banks are not in principle intended to intervene in the fiscal policies of governments (S-G. Cecchetti, K-E. Schoenholtz), but that in practice, the ECB’s accommodative policies were intended to support the private economy, but have in fact encouraged the fiscal drift of certain states, particularly in southern Europe (A. Orphanides). In a third part, the authors analyze the new challenges that central banks must face in order to promote energy and climate transitions, as well as to deal with the development of cryptocurrencies. M. Derer, D. Dohrmann and J. Gerik question the role of the ECB in hedging the financial risks generated by climate change, while M. Thiemann assesses the impacts of monetary policies on the management of the Covid crisis. M. Aglietta and N. Valla trace the history of digital currencies and identify the roles of central banks in their regulation and in the creation of central bank digital currencies (CBDCs). Finally, L. Scialom measures the societal responsibility of central banks in crisis management, while P. Berès shows that since Mario Draghi’s “whatever it takes” in 2012, central banks have replaced welfare states. Note by J-J. Pluchart
EUROPEAN ENVIRONMENTAL REGULATION IN QUESTION
Jean-Jacques Pluchart Directive 2022/2464 on the publication of sustainability information by companies based in the European Union – also known as the CSRD (Corporate Sustainability Reporting Directive ) – sets a new framework for the extra-financial reporting of listed or unlisted companies, large companies, mid-caps and SMEs. Its implementation is expected to take place over the period 2024-2026. Its transposition into national law was due to take place by 6 July 2024 at the latest, but on 26 September the European Commission had to issue a warning to 17 Member States, including Germany, for delays in transposition. This reprimand has provoked reactions in several EU countries – notably in Germany – where elected officials have described the regulatory process as “technocratic”, stating that the CSRD is difficult to apply in its current form, particularly by mid-caps and SMEs. Its premature application would risk weighing on the competitiveness of companies in the Old Continent and thus, generate a distortion of competition between European industries and American and Chinese industries in particular. An impact study of the implementation of the CSRD confirmed that its implementation in Germany would entail additional compliance costs estimated at 1.6 billion euros for German companies alone. This estimate has obviously been contested by environmentalists. However, the Commission has recognized the validity of this argument and has proposed limiting the handicap of European companies by reducing their extra-financial reporting requirements by 25%. In her program, presented in November 2024, the President of the Commission reaffirmed the importance of the Paris Agreement (2015) and opened the possibility of a relaxation of the timetable for the transposition and application of the directive. The debate has just been revived after the latest statements by the new American president, affirming his desire to withdraw the United States from the Paris Agreement and to free the American market from certain environmental and social obligations. Indeed, the ISSB (International Sustainability Standards Board) published on June 26, 2023 the IFRS S1 and S2 (Sustainability 1 & 2) standards which are applicable on a voluntary basis to financial years beginning on or after January 1, 2024 by listed companies of all nationalities, while the European Commission adopted, on July 31, 2023, the more stringent ESRS (European Sustainability Reporting Standards), whose compliance in the European Union has been made mandatory by the CSRD. The regulation of the environmental transition therefore remains under debate within the European Union.
