IASB chairman Sir David Tweedie won’t budge.

This should come as no surprise to anyone, even the bankers who collaborated in making calls for change in the capital markets of both New York and London.

Sir David is resolutely wedded to fair value and is not a man to back down. In France he has been dubbed the ‘super ayatollah’ for his tough approach to financial instruments in IAS 39 and in the US he has been threatened with the wrecking of his organisation over accounting for share options. As neither insults nor threats have so far shifted his opinion it is hard to see how a concerted PR campaign on both sides of the Atlantic will succeed where others failed.

The reason is this. Relaxing fair value is the same as questioning its very foundations and no standard setter is prepared to accept that at this time. Users of fair value mark to market were happy with the standard when things were on the up, yet somehow its unacceptable now things are on a downward curve. Alternatives have been proposed, but convincing arguments seem to be in short supply, whether they be for ‘smoothing’ or ‘averaging’.

And though the tension between standards, or regulation, and successful markets is clear, relaxation also smacks of hiding a problem. The Japanese experience tells us a thing or two about what happens when you go down that route. In truth institutions should view fair value as a route finder. The question, will this investment succeed, should be: what happens under fair value if this investment goes sour?

You can’t escape the fact that everyone caught up in the credit crunch forgot to make that calculation.