| WASHINGTON, April 25
WASHINGTON, April 25 The EU could ignore the
International Accounting Standards board and set its own rules
if the body does not respond quickly to a U.S. easing in
fair-value accounting, a European Central Bank official said on
The IASB, which sets mandatory accounting rules used in the
European Union, on Friday ignored pleas from EU officials to
loosen the rules. It said its guidance was already in line with
changes announced this month by its U.S. counterpart the
Financial Accounting Standards Board (FASB).
EU officials fear that if the IASB makes no immediate
changes, banks in the 27-country bloc would be at a
disadvantage to their U.S. peers and demanded a speedy response
at a meeting earlier this month.
"What we can do is that Europe can very well reclaim its
freedom," said ECB governing council member Christian Noyer at
a press conference on the sidelines of the spring meetings of
the IMF and World Bank.
"It's not the IASB that makes the law in Europe. If we
decide to take back control and write the accounting rules in
the European directive ourselves without following the IASB,
the issue would be resolved. So it's very simple."
Fair value measures assets on company balance sheets by
their market worth.
"A level playing field exists in this area," the IASB said
in a statement after a two-day board meeting.
French Economy Minister Christine Lagarde said she was very
concerned about the IASB decision.
"It is also critical to me that there is the right level of
commitment by all players and I'm particularly concerned to see
that the International Accounting Standards Board is not
cooperating quickly and sufficiently enough," she said.
The FASB issued two sets of new guidance, one of fair value
measurement, the other on impairment of financial assets.
It said there was a need to improve guidance on when an
asset is deemed to be impaired and thus trigger a writedown,
but that this would be done within a broader and urgent review
of the its fair value standard.
An immediate response to FASB's new guidance on impaired
assets was not necessary, the IASB said.
Banks have had to value some complex securitised products
that have become untradeable, forcing them to make big
writedowns, triggering the need to recapitalise at a tough
The IASB said to ensure consistency between it and the FASB
rules, it would include relevant parts of FASB's guidance in
its consultation draft on fair value measurement to be
published in May.
The IASB set a six-month timetable for drawing up a
proposal to replace its fair-value rule, signalling it would
not ditch the normal process to meet political demand.
(Additional reporting by David Lawder, Editing by Chizu