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Night visionAt night almost all cats are greyFinally service cars have been surrenderedKashagan is taken in ice 4 to 5 months of the yearUnnecessary thus to solicit all azimuthsA wonderful starting point for this Odyssey KrugProbably another arm of railway rates and discountsIt is easy to mock the concept of young entrepreneursEach time he sought to preempt the MedefHighly caloric she is crushed and used as fuelNeed to build a third tourist pole in FranceThe banks believe, Charlie McCreevy the fact. Once is not custom, the European Commissioner for the internal market should win some success with banking institutions, launching this week the reform of the international accounting standards they seek to Horn and cry since the beginning of the financial crisis. Very technical first, the subject is nevertheless essential insofar as this reform is expected to significantly less vulnerable banks to the terrible current volatility in the markets.
In the heart of the criticism, the so-called accounting standards IAS or IFRS (International Financial Reporting Standards). Mandatory in Europe since 2006, they are intended to improve transparency by introducing the purchase accounting fair value ("fair value"). Each quarterly closing, listed companies must now recognize the "potential" losses of securities that they own. Let's start with the banks, the IAS 39 standard on accounting for assets and financial liabilities.
When markets slacken, the mechanism shows its limits: it forced banks to translate immediately into their accounts the decline of the assets that they have rather than allow them the opportunity to spread the shock over time. At the risk of exposing their balance sheets and results in very high volatility and, in the end, aggravate the crisis. The problem is even more serious that US banks, that use of other so-called US GAAP accounting standards have, more flexibility. "Current accounting standards is a handicap for our banks to their American counterparts" felt yesterday evening the President of the Republic, Nicolas Sarkozy, in announcing that a European Council would meet on 15 and 16 October, to take action on this issue.
Time press
The European Commission will therefore change the rules of the game. It will allow banks that wish to "reclassify" certain assets of their trading book ("trading book") related to their market activities, to their investment portfolio ("banking book") linked to their banking activities. The advantage of a such sleight Tower In the first case, the securities shall be valued at their market value, which poses serious problems if the markets closed so as to render the concerned completely illiquid assets, as is the case of "rotten structured products today." In the second, on the other hand, the assets, kept up their end of life, can be valued by other methods, such as the present value of cash flows. Result, the Board of the stock market less directly translate in the accounts.
To allow such reclassification, Brussels intends to amend the regulations by which it had approved the IAS 39. A Committee of experts will meet in the week to validate this proposal, which should then be endorsed quickly, as is the procedure by the European Parliament. Without delay that the IASB, the organization that provides standards, eliminates any difference between the IAS and US GAAP for here to on 18 October, as it is committed the 9. Time: the objective is to enable banks to depart from the current rule as soon as their orders for the third quarter. Change the accounting standards, it's a little like proposed financial markets often accused of short-sightedness to change glasses.
