Accounting for banks was better before the introduction of recent changes introduced to relieve political pressure, according to the head of the International Accounting Standards Board.

Sir David Tweedie, speaking in and interview for the Financial Times, said the changes, made to the way certain financial instruments are classified, were undertaken to level the playing between users of US and international standards.

‘I think our accounting was better than the United States, they couldn’t change at that particular stage so we had to move to them.’

The changes allowed IFRS users to reclassify securities from being held for sale to held for investment and therefore avoid a fair value calculation.

The IASB made the changes in a bid to stave off demands for much wider changes to fair value accounting which was facing a barrage of criticism.

Sir Tweedie made it clear that he was not happy with the controversial standard IAS39, which has attracted much criticism.

‘I think we’d actually like to look at the whole standard again because if, for example, you’ve got a treasury bond I could say I’m trading it, so I mark to market and take gains and losses through income.

‘I could say I’m holding it to maturity, so I take the original transaction price and I just keep it there until it matures and any gains or losses I take then.

‘Or, I can say it’s available for sale and I mark it to market but I don’t put it into income until I sell it.

‘Now there’s three different ways of dealing with exactly the same financial instruments. It doesn’t make a lot of sense. We inherited this standard. We don’t think its great, and we’d like to change.’

Sir David Tweedie's TV interview