G20 Finance Ministers and Central Bank Governors push for global standards and consistency
Oct 25, 2010
A Communiqué has been issued from the meeting of the G20 Finance Ministers and Central Bank Governors held in Gyeongju, Korea on 23 October 2010.
Whilst the key outcomes from the meeting concern reform of the International Monetary Fund (IMF) and avoiding so-called "currency wars", the Communiqué also discusses the consistent global implementation of accounting, banking and regulatory standards. The Financial Stability Board (FSB) had previously met on 20 October 2010 to discuss key elements of these financial reforms.
An excerpt from the Communiqué follows:
We are committed to take action at the national and international level to raise standards, so that our national authorities implement global standards consistently, in a way that ensures a level playing field and avoids fragmentation of markets, protectionism and regulatory arbitrage. To build a stronger global financial system, we have agreed to prioritize the following issues on the agenda for the Seoul Summit:
The FSB press release discussing the FSB meeting on 20 October 2010 notes the following in relation to accounting convergence:
Accounting convergence. The FSB recognised progress toward improved, converged accounting standards in four main areas: impairment of financial assets; derecognition; addressing valuation uncertainty in fair value measurement guidance; and netting/offsetting of financial instruments. The FSB reaffirmed its support of standards that do not expand the use of fair value measurement recognition for lending activities, a position echoed by the comments of many investors and other stakeholders, and expressed hope that the FASB and IASB consideration of stakeholders' comments on proposed standards will result in improved and converged approaches. More generally, the FSB encourages the IASB and FASB to continue their efforts to achieve improved converged financial instrument accounting standards by June 2011.
The G20 World Leaders' Summit will be held in Seoul, Korea on 11-12 November 2010. Click for:
- G20 Finance Ministers and Central Bank Governors Communiqué (link to Seoul G20 summit site)
- Financial Stability Board press release (link to FSB site)
- Our credit crunch page.