EU wants accounting rules relaxed
05-04-2009
European Union finance chiefs have called for accounting norms in Europe to be relaxed in line with recent US moves to give banks more breathing room, so their European rivals are not left disadvantaged.
Under pressure from the US Congress, the US Financial Accounting Standards Board voted on Thursday to modify the "mark-to-market" accounting standard, which has been blamed by some for worsening the global financial crisis.
The changes will allow banks to hold some toxic assets to give them more time to recover in conditions where financial markets are frozen, rather than regularly marking their prices down to currently depressed market prices.
"These changes could result in a significant divergence of international accounting practice for financial instruments," EU finance ministers lamented in a joint statement after a meeting in Prague.
They called on the standard-bearer for Europe, the London-based International Accounting Standards Board, to work with its US counterpart "with the aim of achieving equivalent treatment" for European banks.
