Don't blame the standards, says BDO chief
Poor business decision to blame for the crisis, not accounting
Poor business decisions were behind the losses suffered by banks, not
accounting rules, according to
Newman, chief executive of BDO International.
Writing in a letter to the Financial Times this morning Newman points out
that not every bank made huge write down during the crisis and yet they all
broadly used the same accounting rules.
He writes: “It is unfortunate if people are persuaded that accounting rules
are to blame for bad lending decisions and poor investments. Banks, and other
financial institutions needed injections of monies from governments (and others)
because they lost money and were short of cash not merely because of accounting
Newman’s letter comes in response to previous
in the FT over the Christmas break accusing international accounting standards
of contributing to the crisis.