New RBS chief backs fair value

The new chief executive of
Royal Bank of Scotland has
thrown his weight behind the controversial system of fair value accounting.

Stephen Hester, who takes up the post at the troubled bank later this month,
said he supported the system of mark to market accounting, despite opposition
from many of his peers, politicians and regulators, who blame it for
exacerbating the effects of the credit crunch.

‘We have a team of people who are on high alert to comb over absolutely
everything from a credit perspective,’ Hester told the
Sunday Telegraph.

He added that he would ‘not be surprised’ if RBS made a full-year loss after
making billions of pounds of write downs.

Further reading:

accounting not as good as it was – IASB

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