Bank supervisors intervene in global accounting deadlock
LONDON Jan 4 (Reuters) - A top banking supervisor has listed minimum requirements it wants to be used by banks making provisions for bad debt, in a letter to accounting industry rule-setters struggling to agree new global standards.
World leaders called in April 2009 for a single set of global accounting rules to improve transparency and force banks to make provisions early enough so as not to have to be bailed out by taxpayers in a financial crisis.
The International Accounting Standards Board, whose rules are used in over 100 countries, and U.S. Financial Accounting Standards Board have been trying to forge those new rules but have failed to find common ground on bad debt provisions.
"We are concerned ... the boards may not reach convergence given the FASB's recent decision to pursue an impairment model that differs from the IASB's model," the Basel Committee on Banking Supervision said in the letter, dated Dec. 21 and made public on Friday.
The comment marked an escalation of pressure on the two accounting boards who have repeatedly failed to meet deadlines set by the group of 20 leading economies (G20) for common rules.
The Basel Committee also said that what the boards do agree may not pass muster.
"While the boards have made significant progress in developing expected loss models, we also remain concerned as to whether the eventual standards will result in the early and timely build-up of sufficient levels of credit allowances."
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.