The European Central Bank (ECB) has today published a report entitled “Assessment of accounting standards from a financial stability perspective” that was prepared by the ESCB Banking Supervision Committee. The Committee comprises representatives of the national central banks and banking supervisory authorities of the European Union and the ECB.
Accounting standards can have a significant impact on the financial system, in particular via their potential influence on the behaviour of economic agents. Published financial statements provide financial and economic signals on which decisions are made. Furthermore, the assessment of management is largely based on accounting figures; management decisions, in turn, are influenced by accounting. Hence, accounting standards can cause financial institutions to behave in a way that may have an impact on financial stability.
Against this background, the report provides for an assessment, on the basis of some predefined criteria, of the International Financial Reporting Standards (IFRS) – as have recently been adopted in the EU – from the perspective of the stability of the financial system.
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