IASB response to credit crunch blasted
Leading German MEP criticises the IASB for responding too slowly to the credit crunch
Klinz: IASB too slow
A leading European MEP has criticised international standard setter
IASB for responding
too slowly to the global credit crunch.
‘I would have wished they had come up with something much sooner because the
crisis started in the middle of last year,’ said Wolf Klinz, a German Free
Democratic Party MEP. ‘It has taken them nine months. Even if they pretend they
were all taken by surprise, it is questionable whether nine months is
justifiable.’
Klinz is a member of the EU’s
Economic
and Monetary Affairs Committee, which has been scathing about the
accountability and governance of the IASB.
The IASB announced last week a programme of meetings to discuss the issue of
hard-to-value assets. The review of the rules and changes to off-balance-sheet
accounting are a result of recommendations from the Financial Stability Forum.
The crisis has come under political scrutiny as the impact of the US
write-downs has filtered through to European institutions.
‘We’re waiting for the IASB to come forward with proposals and to make sense
of mark-to-market so that it doesn’t produce highly unsatisfactory results,’
said Klinz. ‘The fact is that many of the depreciations of the banks were due to
this principle.’
The IASB, however, has maintained that it will not ‘change’ the fair-value
rules. The IASB has also begun a project to review off-balance sheet reporting.
The standard setter is understood to be maintaining this position, despite a
recent petition from the
Institute of International
Finance (IIF) a global banking alliance of more than 300 institutions,
chaired by Deutsche Bank chairman Josef Ackermann to relax the rules on fair
value.
The IIF has since watered down its comments.
The IASB will host the first in a series of meetings to review the rules in
London on June 13.