Saturday, March 29, 2008
Watchdogs push for accounting rules review
Regulatory watchdogs, including the Financial Services Authority and the US Federal Reserve, are proposing a review of accounting rules following the credit crunch
The news comes in the wake of the collapse of US investment bank Bear Stearns, brought down by the sub-prime crisis.
The Financial Stability Forum’s Senior Supervisor’s Group reviewed 11 of the largest banking and securities institutions. It said some companies failed to properly price the risk of exposures to off-balance sheet vehicles, at precisely the time that it became difficult or expensive to raise funds to deal with the issue.
‘Several firms challenged by market events acknowledged the need to improve their
integration of credit and market risk management with accounting and financial control functions,’ last week’s report said.
See full Article.