BusinessCompany NewsLord George fears fair value jitters

Lord George fears fair value jitters

Former governor of Bank of England says fair value may affect already delicate markets

Fair value accounting may exacerbate problems in already delicate markets,
the former governor of the
Bank of England
has warned.

As fears grow about the impact of new fair value rules in the US implemented
today, Lord Edward George voiced fears about the reaction of the markets to fair
value fluctuations.

‘My worry is that people might react in an instinctive way to particular
numbers and it could add to nervousness. And with all the debt that’s in the
market it could be tricky in this economy,’ Lord George said.

He said having a common set of reporting standards, so the markets could work
better, is in principle ‘absolutely right’, despite some people being less than
enthusiastic about the change. But the outcome of applying fair values will
produce great volatility, and ‘that’s a worry’.

‘People shouldn’t react to headline figures. The companies should explain why
the figures change so users can respond in an informed and balanced way’, he
added.

‘What’s in my mind is that those that are using the accounts when they are
produced should understand what’s involved, as before fluctuations were smoothed
out,’ he said in an interview published in today’s Accountancy Age.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

1m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

5m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

5m Alia Shoaib, Reporter
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

8m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

8m Emma Smith, Managing Editor
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

8m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

8m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

8m Emma Smith, Managing Editor