Schapiro's stance is a threat to recovery
We know less now about the commitment to international accounting standards in the US, than we did before the election
Christopher Cox, the previous head of the SEC, Washington’s financial
watchdog, had demonstrated his belief in IFRS by drawing up a roadmap to
conversion.
His successor, Mary Schapiro, while making public statements on the issue,
seems to have added little to our understanding of where the US is going.
Last week we reported that Schapiro had met with International Accounting
Standards Board chairman Sir David Tweedie. Let’s hope he left with a fuller
understanding of her direction than most of us have.
Schapiro had said that she would not be bound by the roadmap drawn up by Cox,
and has expressed some concerns about the general direction of IFRS. It’s also
reported that she has written a letter saying she is not prepared to delegate
standard setting outside the US.
All that places the IASB in a difficult position, especially the issue of
‘delegation’. What we should hope is that the ‘delegation’ remark is not an
expression of some underlying protectionist attitude. It was protectionism that
helped turn the crash of 1929 into a worldwide depression.
The crisis is global and will need a global solution. Buying into a rigorous
set of international standards is surely the best way forward. While clearly not
the whole solution, it is global standards aiding the global movement of capital
that will ease the way for business to start moving again, not a retreat into
unilateral policy demands.
Observers wondered whether an Obama presidency would usher in a more
protectionist regulatory attitude. Schapiro has said little so far to indicate
otherwise.