##u and sander tordoir for their contributions to this article. i remain solely responsible for the opinions contained herein. 2 see standard eurobarometer 88, which was carried out by the european commission between 5 and 19 november 2017. 3 see reinhart, c. and rogoff, k. ( 2009 ), this time is different : eight centuries of financial folly, princeton university press. 4 see jaumotte, f. et al. ( 2013 ), “ rising income inequality : technology, or trade and financial globalization? ”, imf economic review, vol. 61 ( 2 ), pp. 271 - 309. 5 see oecd ( 2012 ), employment outlook 2012. 6 see devereux, m. et al. ( 2008 ), “ do countries compete over corporate tax rates? ”, journal of public economics, vol. 92 ( 5 - 6 ), pp. 1210 - 1235. 7 the former represents a textbook view of international trade, whereby gains from trade are unevenly distributed ( e. g. between skilled and unskilled workers ) but can be fully equalised by means of lump sum transfers. for an example of the latter view, see rodrik, d. ( 2017 ), “ too late to compensate free trade ’ s losers ”, project syndicate, 11 april. 8 see also bourguignon, f. ( 2016 ), “ inequality and globalization ”, foreign affairs, january / february, pp. 11 - 15. 9 see jaumotte, f. et al. ( 2013 ), op. cit. 6 / 7 bis central bankers'speeches 10 see baldwin, r. ( 2016 ), the great convergence : information technology and the new globalization, belknap press : an imprint of harvard university press. 11 see badinger, h. ( 2005 ), “ growth effects of economic integration : evidence from the eu member states ”, review of world economics, vol. 141, no 1, pp. 50 - 78. 12 see rueda - cantuche, j. m. and sousa, n. ( 2016 ), “ eu exports to the world : overview of effects on employment and income ”, dg trade chief economist notes, issue 1, european commission, february. 13 see chopin, t. ( 2017 ), “ defending europe to defend real sovereignty ”, policy paper no 194, notre europe – jacques delors institute and robert schuman foundation

all asset portfolios at every moment. that would not be the case if all financial markets would obey to the canons of perfect competition, would process information with full efficiency and would not be subject to overshooting, herd behaviour and price misalignments during significant periods of time. as this does not correspond to the real world, full fair value tends to create what has been dubbed as “ artificial volatility ” in a company ’ s earnings, particularly in the case of financial institutions. when profits are artificially inflated, this may lead to higher dividends and bonuses based on the recognition of unrealised gains. the undesirable side effect of such payments would be an effective depletion of capital ; a capital cushion that might be needed at a later stage when the markets correct. in some cases fair value accounting may provide information that is in my view outright wrong even for investors. consider the recent example of a swiss bank. the bank ’ s recently published first quarter results was only sfr 44m bis central bankers ’ speeches because the bank had to recognise losses in the range of sfr 1. 5 bn from an improvement in its own creditworthiness that raised the value of its own debt securities. presumably the opposite occurred in some previous year, meaning recognition of profits, when it may have suffered a decrease in its rating. it is doubtful that this, in my view, distorted information provides the right incentives for proper risk management and can indeed be considered to be “ useful ”, which is a stated objective that accounting should meet in line with the iasb ’ s conceptual framework. from a financial stability perspective, the impact of “ short - termism ” and volatility of accounting information can be very detrimental as both may aggravate pro - cyclicality. this means more severe downturns and more acute building up of risks, resulting in a misallocation of resources that lead to an overall welfare loss for society. this is also consistent with the findings of a recent paper by the federal reserve bank of boston1 which also concluded that implementing fair value accounting more broadly may not necessarily provide financial statement users with more transparent and useful reporting. additionally, it stressed that financial stability may be negatively impacted by fair value accounting due to the interconnectedness of financial institutions, markets and the broader economy. the second example where accounting seems to have an impact on market dynamics and cyclicality within the financial system is the provisioning or impairment methodology the main criticism of the “ incurred