HANS HOOGERVORST, incoming head of the International Accounting Standards Board, has called on the European Commission to endorse IFRS 9, saying it will lessen the impact of banks’ exposure to Greek liabilities.
The new standard allows banks to price assets at cost if they are being held over time; this is a change from previous requirements to price assets at the going market rate, a system that caused problems during the credit crisis when the value of such assets plummeted.
Hoogervorst (pictured) told a recent conference: “There are many people in the Commission who think we should adopt it quickly because it gives us a little bit more leeway in terms of Greek government bonds,” Reuters reports.
The Commission has been holding off endorsement until the whole standard was finalised; issues surrounding incurred loss have not yet been resolved and critics say that rushing through IFRS 9 will do nothing more than allow banks to cover up Greek debt.
“This crisis shows that IFRS 9 is indeed a better standard and I am absolutely convinced the EU will in the end endorse it,” the new chairman concluded.
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