Overview – ruffling feathers

Though only commissioner for internal markets since November last year, Charlie McCreevy is already a frequent presence in the financial press, not least because he’s made one of his pet subjects the International Accounting Standards Board.

Most agree that the IASB is making something of a good fist of seeing through the introduction of a raft of new standards under its tough talking Scottish chairman Sir David Tweedie. But McCreevy, the Irishman from County Kildare, has decided it needs sorting out. But he hasn’t picked on the technicalities of some obscure standard on derivatives (more on that in a moment). No, his headlines are all about the accountability of the IASB. Or the lack of it, as he sees it.

A member of the republican Fianna Fail party, a father of seven and former member of the Irish parliament, McCreevy has ministerial experience in spades (social welfare, tourism, trade and latterly finance) and a chartered accounting qualification to boot.

As a politician, his overriding obsession will therefore be accountability and making his voice heard forcefully and publicly. His accountancy background will invariably see him focus attention on the financial institutions he interprets as failing on this front. It’s a deadly combination for the IASB.

But while McCreevy has levelled criticism at the body, he has steered clear of targeting any barbed remarks at Tweedie himself.

The Scot has so far resisted sending any salvoes back at the Irishman and the two may well be getting along fine behind closed doors. It’s a canny game they’re playing and the two have already met in London to talk things through. Given the Scotsman’s famed liking for a verbal punch up and McCreevy’s self-proclaimed reputation for being stubborn, the contest looks set to be an intriguing one.

What McCreevy wants is more accountability at the IASB to Europe. More specifically to European politicians. This is only fair, he argues, because the new standards affect thousands of European companies and yet there is precious little representation for Europe on the board’s controlling body, the International Accounting Standards Committee.

The IASC is currently chaired by Paul Volker, a former federal reserve chairman, and its members are ostensibly from North America. McCreevy is as a result still a long way from what he wants.

The Irishmann will also want to deal with another thorny accounting issue, that of the now notorious, though rather arcane, IAS39 standard on derivatives. Last year, the EC forced Tweedie to remove certain parts to make it more portable for European banks to adopt. The full version would make their balance sheets too volatile, they argue.

Tweedie is reviewing the standard but is understood to want to stick with the original. It is yet to become clear which way McCreevy will swing once he starts looking at it.

They may have already spoken on the issue, though both appear to be keeping the peace on the matter. For the time being.

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